Growing Oil Production, Developing New Subsurface Industries, Priorities For Saskatchewan Government

Saskatchewan Energy Minister Jim Reiter

For our recent four-part Saskatchewan series, click on the links below:

Saskatchewan Slowly Recovering From Pandemic Lows

Thermal Operators Driving Production In Saskatchewan Heavy Oilfields

Western Saskatchewan Tight Oil Plays Slow To Recover

Southeast Saskatchewan Focused On Frobisher Beds Activity

Saskatchewan’s government remains confident of future oil demand, with a priority on rebuilding production to 600,000 bbls/d to help meet that demand, Energy And Resources Minister Jim Reiter said at the Canadian Association of Energy Contractors (CAOEC) annual luncheon last week.

The province is also developing other subsurface resources including helium, lithium, as global demand climbs for these commodities, said Reiter. It is also focused on building out its geothermal energy potential.

“More and more people are realizing oil and gas are here to stay and as technology improves it’s becoming cleaner,” said Reiter, adding that energy security concerns are adding to petroleum’s longer-term viability. North America, however, needs to pull together and address its security issues. “Combined with Alberta, we could be a secure supplier for North America. I really don’t understand how America can go hat in hand to Venezuela.”

“The events in Europe underscore the need for North America to get its act together,” he added. “Europe was in a precarious position before Ukraine. It said no to oil and gas, no to coal, no to nuclear. Europe didn’t have a good backup plan. We can’t have the same thing happen in North America. We have all the resources. We need to build on our advantages.”

Saskatchewan is the fifth largest onshore oil producing region in North America. The sector makes up 15 per cent of its economy. Current oil production sits at around 460,000 bbls/d. The province has put in place a series of incentives to increase production by one-third to reach 600,000 bbls/d. “There were 2,000 wells drilled last year,” said Reiter. “Clearly, the industry is alive and well.”

Incentives include programs that target both production increases and emissions reduction, with production incentives focused on royalty reductions for horizontal well development, EOR, and building new infrastructure. Environmental incentives include an associated gas royalty credit for capturing methane, along with a $400 million well reclamation program.

The province has also launched its own, “made in Saskatchewan” climate change strategy and a program to encourage more CCUS, said Reiter.

“We are also supporting helium, lithium, and hydrogen and geothermal,” he noted. The province recently launched a critical minerals strategy.

DEEP Earth Energy Production Corp.’s first commercial project — with planned capacity of 25 MW — is set to begin construction in the third quarter. Reiter said he is optimistic geothermal could become a valuable clean power source in the near term. The company’s CEO president and CEO, Kirsten Marcia, discussed the project in a feature interview with the Bulletin.

“There is 25 MW there, plus 200 MW more potentially [in the future]. There is potential to meet power demand with this clean source.”

Helium development also continues in southwest Saskatchewan. There has also been promising exploration for lithium from saline aquifers in the southeast area of the province.

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