The provincial government has revealed two new royalty programs aimed at helping to increase oil production and create jobs Monday.
Part of Alberta’s Modernized Royalty Framework the Enhanced Hydrocarbon Recovery Program and the Emerging Resources Program came out of the Royalty Review Advisory Panel.
Officials expect the Enhanced Hydrocarbon Recovery Program to maximise production from existing oil and gas projects. The Emerging Resources Program will look to aid higher-risk and higher-cost plays and areas that hold a large resource potential in an effort to promote innovation.
The two new incentive programs are a continuation of the work from the province following the Royalty Review.
“We can get more rigs out there drilling, create jobs and help generate greater long-term returns for Albertans by promoting production in underdeveloped or yet-to-be-developed areas,” said Minister of Energy, Margaret McCuiag-Boyd in a press release.
When it comes to determining the royalty rates, these programs will take into account the higher costs associated with enhanced recovery methods along with the inflated costs when dealing with developing an emerging resource.
“CAPP welcomes the Emerging Resources Strategic Overlay and the Enhanced Hydrocarbon Recovery programs within the Modernized Royalty Framework,” said Tim McMillan, President and CEO, Canadian Association of Petroleum Producers.
The two programs will take effect on Jan. 1, 2017 as part of the overall Modernized Royalty Framework.
