Province Unveils New Royalty and Regulatory Packages for Oil and Gas Industry

By 250 News

VICTORIA - The Province has developed an oil and gas stimulus package aimed at attracting  investment and producing immediate economic benefits for B.C.
 The stimulus package is expected to generate $2.50 in  revenue for every $1 dollar of  royalty credit given to a company.

The package includes four royalty and two regulatory plans  the Province hopes will make  B.C.  more attractive to new energy based projects and kick start the industry.

Royalty initiatives included in the package are:

* A one-year, two per cent royalty rate for all wells drilled in a 10 month window (September 2009 - June 2010).
* An increase of 15 per cent in the existing royalty deductions for natural gas deep drilling.
* Qualification of horizontal wells drilled between 1,900 and 2,300 metres into the Deep Royalty Credit Program.
* An additional $50 million allocation for the Infrastructure Royalty Credit Program to be offered this fall to stimulate investment in oil and gas roads and pipelines.

Regulatory initiatives included in the package are:

* Commingling in the plains area, to be announced by the Oil and Gas Commission in the near future; and,
* Amendments to the drilling licence regulation to create flexibility that will allow industry to move wells to production while not losing privileges to convert drilling licences to leases.

The package is projected to increase drilling activity, generate substantial industry investment, and provide incremental royalty revenues to the Crown.

Crown revenue from the stimulus package will go to education, health care and social program funding and development.

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