Government of British Columbia

Government of British Columbia

February 17, 2011 13:00 ET

Government of British Columbia: New Round of Credits Keep Oil and Gas Building in B.C.

VICTORIA, BRITISH COLUMBIA--(Marketwire - Feb. 17, 2011) -

NEWS RELEASE

For Immediate Release

2011ENER0004-000145

Feb. 17, 2011

Ministry of Energy

NEW ROUND OF CREDITS KEEP OIL AND GAS BUILDING IN B.C.

VICTORIA - The Province is putting up to $120 million in royalty credits on the table to spark the next round of infrastructure development in B.C.'s petroleum and natural gas sector.

Starting today, a new instalment of the Ministry of Energy's successful Infrastructure Royalty Credit Program will accept applications from companies who want to invest in new or upgraded roads and new pipelines that generate economic development and job creation.

Industry must fund the entire cost of the selected infrastructure projects. The companies can then recover up to 50 per cent of an approved project's costs through credits that reduce the natural resource royalties they must remit to government.

The resulting infrastructure improves access to underdeveloped areas and supports year-round exploration and production activities. This generates more jobs and business opportunities than would otherwise occur and promotes the competitiveness of B.C.'s natural gas sector.

As in previous years, only projects which offer the highest economic benefits for British Columbia will be approved. Applications are accepted until April 14, 2011 at 2 p.m. PDT. The request for applications information can be found at:
http://www.empr.gov.bc.ca/OG/oilandgas/royalties/infdevcredit/Pages/default.aspx

Quotes:

Minister of Energy -

"We've been very successful at leveraging investor capital to generate additional royalty revenue for the Province," said Minister of Energy Steve Thomson. "Not only does the program help create more year-round jobs, it results in higher revenues that fund critical programs like education and health care."

Canadian Association of Petroleum Producers -

"The government's royalty credit programs are a major force in the growth and success of B.C.'s natural gas sector," said David Pryce, vice-president, operations for the Canadian Association of Petroleum Producers. "It's a very competitive industry and it's innovations like the Infrastructure Royalty Credit Program that help keep industry investment focused on B.C."

Facts:

* Since its inception in 2004, the Infrastructure Royalty Credit Program has led to the development of 76 new road-based ventures and 97 new pipeline projects.
* This accounts for more than $1 billion in capital investment and about $5 billion in private sector drilling and other investment activities.
* The 2011 Infrastructure Royalty Credit Program is expected to generate approximately $240 million in new industry capital spending in B.C.
* The Province aims to achieve a five-year rate of return on investment of $2.50 per royalty-credit released. In other words, five years from now, the 2011 allocation of infrastructure royalty credits is expected to have generated new net incremental royalties of $300 million.
* The return on investment increases with time because wells produce for many years, meaning the earliest instalments of the program are providing the largest source of revenue for the Province.
* The natural gas and petroleum sector is a major economic engine for B.C. The sector is expected to generate $1.37 billion in government revenue in fiscal 2010-11, accounting for nearly 50 per cent of B.C.'s total resource revenue.

Learn More:

* Details about the Infrastructure Royalty Credit Program, including request for applications and information about previous instalments of the program, can be found at:
http://www.empr.gov.bc.ca/OG/oilandgas/royalties/infdevcredit/Pages/default.aspx

* For more information on B.C.'s royalties and royalty programs:
http://www.empr.gov.bc.ca/OG/oilandgas/royalties/Pages/default.aspx

For more information on government services or to subscribe to the Province's news feeds using RSS, visit the Province's website at www.gov.bc.ca.

Contact Information

  • Ministry of Energy
    Jake Jacobs
    250 952-0628 or 250 213-6934 (cell)