Province awards $120 million in royalty credits

The Province is awarding $120 million in royalty credits to 19 companies, for 31 oil and gas infrastructure projects.

Minister of Energy, Mines and Petroleum Resources Blair Lekstrom made the announcement on Wednesday.

The program provides oil and gas companies with royalty deductions in exchange for industry investment in road and pipeline infrastructure.

Companies are required to fund the entire cost of an approved infrastructure project and may receive up to 50 per cent of the eligible project costs from the Province,  paid in the form of royalty deduction, once the project is completed.

As of March 31 of this year, the program was responsible for the development of 58 new or upgraded all-season roads and 52 pipeline projects in the Province.

The 31 new road and pipeline projects will support oil and gas exploration, and improve access to underdeveloped areas of the northeast.

Lekstrom says the increased activity and new production will generate additional royalty revenue to the Province.

Earlier this year, companies submitted a Request for Applications. The Province then reviewed each project’s potential economic benefits to B.C., and awarded the credits in order of importance.

The Province received applications for 68 projects involving a total request of approximately $760 million in estimated construction costs.