Huge Interest in Royalty Credit program

By 250 News

Victoria, B.C. - The Province has awarded $120 million in royalty credits under the Infrastructure Royalty Credit Program to 19 companies for 31 oil and gas infrastructure projects.

These projects are expected to present new and improved infrastructure that will provide more jobs and opportunities in B.C.

These 31 new road and pipeline projects will support oil and gas exploration and production, and improve access to underdeveloped areas of the northeastern part of the province. It is anticipated the  increased activity and new production will generate additional royalty revenue to the Province.

Projects were awarded credits under the Infrastructure Royalty Credit  Program following a Request for Applications and evaluation of each project's economic benefits to B.C.  As in previous years, industry response to the Request for Applications was very strong, with applications for 68 projects involving a total request of approximately $760 million in estimated construction costs.

Under the program, oil and gas companies get royalty deductions in exchange for industry investment in road and pipeline infrastructure. Companies have to fund the entire cost of an approved infrastructure project and may receive up to 50 per cent of the eligible project costs from the Province paid in the form of royalty deduction once the project is completed. As of March 31, 2009, the Infrastructure Royalty Credit Program was responsible for the development of 58 new or upgraded all-season roads and 52 pipeline projects in B.C.

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