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New incentives for oil and gas – Metro US

New incentives for oil and gas

With oil and gas prices dropping to new lows, Alberta’s government is hoping to sail the province’s oil and gas sector through an economic siege after unveiling a three-point incentive plan aimed at saving jobs.

The program aims to help small energy companies who have been hit hard by the global credit crunch and plummeting commodity prices, said Energy Minister Mel Knight in a news conference in Calgary.

“While we cannot make up for the impact that global financial markets are having in Alberta, we are doing what we can,” said Knight, who stressed the new plan is not a government bailout.

Companies within the first year of the program that are drilling new wells will receive a $200-per-metre-drilled royalty credit on a scale based on last year’s production levels.

Knight said the government will also offer up a five per cent royalty rate within the first year of production to reinvest in Alberta’s once-booming energy sector.

The government will kick in $30 million to clean up old oil and gas well sites under the new plan, said Knight.

The announcement of the program comes after the province recently created a transitional royalty rate to help companies in the oil and gas sectors to maintain oil production.

“This is a global economic situation that we are not immune to,” said Knight, who said more programs to help the industry could be coming.

“Alberta is in this like everyone else.”

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