Drilling for "aggressive targets"

Austin M.
Austin M. Davis
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Saskatchewan has back-to-back record years for oil production

Saskatchewan’s oil patch topped its own record for oil production by producing 487,400 barrels per day.

THE CANADIAN PRESS/Larry MacDougal

The province produced 177.9 million barrels in 2013, up from the record of 172.9 million barrels set in 2012.

“We’ve set some fairly aggressive targets for where we think our economy should be in years forward,” said Tim McMillian, energy and resources minister.

He said the energy sector is a “great part” of Saskatchewan’s economy that continues to “reinvent itself.”

A total of 2,433 horizontal oil wells were drilled in 2013, another record for the province.

He said new technology in the oil industry has redeveloped mature oil fields to get larger rates of return and higher proportions of recovery rates.

“When it’s reflected in record production numbers, I think that that’s a sign that it’s working,” McMillian said.

Two-thirds of all drilling in 2013 happened in the Lloydminster and Kindersley-Kerrobert areas. The Estevan-Weyburn area was also up from 2012 and Swift Current’s oil production remained consistent.

He said the prices for oil were currently above what the Saskatchewan government had predicted in the budget, but the challenges are in getting the product to market.

“We have an extra step,” McMillian said. “We need a rail capacity. We need pipeline capacity and we need trucking capacity.

“The energy industry and the oil industry is one very dynamic industry and it finds solutions to problems.”

McMillian said four years ago almost no oil left the province in rail cars, and now that figure is up to 20 per cent.

“We’re very hopeful that Keystone XL gets approved and it frees up capacity on our other existing pipelines,” McMillian said.

He mentioned the possibility of three other pipelines or expansions, and said that resolving transportation issues for oil in the province will sustain the rate of oil production.

As for short-term goals, the province wants to continue to build on back-to-back record years while balancing bureaucracy and health and environmental issues.

“We don’t ever want there to be a situation where a bureaucracy of how governments process applications becomes a problem,” McMillian said. “Although on the other side, we need to ensure that we have appropriate safety and environmental standards and that they are being complied with.”

He said the government has brought in regulations about emissions of natural gas flaring that now need to be captured. He mentioned airshed monitors testing the air around Saskatchewan and paying close attention to bodies of water as environmental concerns the government is looking at.

The Fraser Institute’s annual Global Petroleum Survey ranked Saskatchewan as the top jurisdiction in Canada for oil and gas investment policies.

Organizations: Fraser Institute, Global Petroleum

Geographic location: Saskatchewan, Lloydminster, Swift Current Canada

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