A recent decision by the Saskatchewan government to streamline its oil and gas well licensing system could result in a faster development of crude oil resources in its Bakken play in the south and also spur investments in its oil sands deposits in the north, provincial Energy and Resources Minister Tim McMillan said Thursday.
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The new system, which was introduced March 19 in the province's 2014/15 financial budget, will now offer a single-window facility compared with the need for operators to seek permits from three provincial agencies -- the Departments of Agriculture, Environment, and Energy and Resources -- he said on the sidelines of the CAPP Scotiabank Investment Symposium in Toronto.
"[The new system] will expedite well licensing approvals from several weeks to maybe even just a day," McMillan said, noting the new offering comes after extensive consultations with both the industry and stakeholders. "For the past six years, we have been working on streamlining our regulatory process."
"Operators will also derive benefits, cost savings, with them not having to go through several levels of approval. We have pretty much mirrored what happens in Alberta and British Columbia," he said.
McMillan, however, said that using the streamlined system Saskatchewan will not compromise the province's role as a protector of the environment and stakeholders rights.
"There are 3,000 to 3,500 new oil and gas wells being drilled each year in the province, with the number of horizontal wells being drilled, compared with vertical ones, showing a dramatic increase," he said.
Crude oil production in Saskatchewan recorded an average 487,400 b/d last year and is expected to grow further in 2014, he said, while addressing the event.
McMillan did not give a forecast for 2014 crude oil production, but noted the province is expected to take in revenues of C$15 billion ($14.6 billion) from the sale of crude and natural gas in fiscal 2014/15.
About 50% of our crude is heavy with the total estimated oil-in-place being 43 billion barrels, he said, adding output from Bakken, which was some 100 b/d in 2008, now stands at 70,000 b/d.
New thermal projects that use polymer and carbon dioxide flooding and micro SAGD technology have resulted in oil recoveries increasing by 3%-7% over the production life of the field, McMillan said.
"We also have a cost-effective production base with operators spending C$44 to produce a barrel," he said.
Meanwhile, the Saskatchewan government is hopeful it will attract investments over the next few years into oil sands deposits located along the border with Alberta, he said.
There are 2.7 million hectares of under-developed land available for operators, he said, noting the expectation is for major oil sands producers in Alberta to pick up Crown lands in five auctions to be held from April 2 until December 1.