Energy Minister’s Outlook on Saskatchewan
Saskatchewan Energy Minister Bill Boyd declares full ahead on oil, but leaves many questions about atomic power unanswerred
Rising commodity prices, a business-friendly government and a competitive royalty regime improved Saskatchewan’s fortunes in recent years. Alberta Oil’s associate editor Patrycja Romanowska sat down with provincial Energy Minister Bill Boyd to discuss what’s hot, what’s not and what the energy industry can expect in the current economic climate.
Alberta Oil: The Bakken oil play has been on everyone’s lips. What’s going on down there in southeastern Saskatchewan?
Bill Boyd: Industry as a whole is clamoring to get involved in that area. This is a really exciting development that has resulted in a tremendous amount of activity, tremendous amount of drilling, a lot of employment and an absolutely incredible amount of investment. It is great news for our province.
AO: The Bakken oil play is not new. There has been activity for many years in Saskatchewan and on the American side. Why the recent rush?
BB: That field has been in existence for some 50 years. It’s largely the well completion technology changes that have come about for the last few years that resulted in this. Because of the quality of the oil and the relative ease to access now with the technology that is available, it has become an extremely hot play, the companies are very excited about it and their cost structures are very low for this resource.
AO: Is the current economic downturn dampening that enthusiasm?
BB: The companies that are primarily involved in the Bakken are still doing rather well. As a result, their capital budgets are still very much on track. We are encouraged by that. We’re not immune to the problems that are out there. Prices are dramatically decreasing. Companies are having a bit more difficulty raising capital. They are being a lot more cautious. We’re trying to take the steps we can to make sure that it doesn’t turn into a protracted long decline. We’re optimistic.
AO: When oil topped $100 a barrel, there was a lot of talk, especially by companies like Oilsands Quest, about developing oil sands in Saskatchewan. That talk seems to have died down. Has Saskatchewan oil sands development become the latest casualty of the economic crisis?
BB: Not a casualty, a bit of a retrench, a bit of a pullback. The companies are trying to identify the resource. It is a very significant resource – there’s no question about it. However, it is much different than on the Alberta side and much deeper in the ground so it doesn’t lend itself to mining operations but more to SAGD [steam-assisted gravity drainage, for “in-situ” underground extraction]. Petrobank has got some proprietary technology they’ll be employing. The key thing is it will be in-situ. Also, there is a large saline aquifer that is going to be used as the water source. There isn’t an obvious concern about draining a river or draining a lake. That’s quite important.
AO: Petrobank says that a chief concern of theirs in terms of developing this resource is a lack of infrastructure in that area of the province. This seems like an obvious place for government to step in if it was to encourage more development. Are there any plans?
BB: As the development goes forward, yes, without question there will be plans on infrastructure needs. We’re certainly recognizing that is going to be part of our role as government. As we get closer and closer, it looks like there is going to be production – and there are still hurdles with respect to that – that the companies are going through with. As we see oil prices recover, we’ll see those things being ironed out.
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