The Province of Alberta is extending its loan to the Orphan Well Association (OWA) by up to $100 million. This loan will bolster the association’s immediate reclamation efforts and generate up to 500 direct and indirect green jobs in the oil services sector.
“We are getting Albertans back to work while staying true to our province’s reputation as a responsible resource developer,” said Minister of Energy Sonya Savage. “This loan will increase economic activity across our province and is an important step in addressing the pressing issue of oil and gas liabilities – particularly in rural Alberta.”
The government and the OWA are finalizing specific loan terms and conditions, including establishing a repayment schedule. Both parties have agreed that this investment will be completed before April 1, 2021.
The loan extension will enable the OWA to decommission approximately 1,000 wells and start more than 1,000 environmental site assessments for reclamation.
The Alberta government previously provided the OWA with a $235 million interest-free loan. The OWA began repaying the loan in 2019, using money received from industry through the annual Orphan Fund Levy.
“By staying on top of the orphaned well inventory, we’re helping to ensure a sustainable energy industry in Alberta,” said Lars De Pauw, executive director, Orphan Well Association. “The Orphan Well Association continues to increase our efficiencies while also increasing the number of sites we are addressing. This loan will help us further these efforts while helping Alberta’s service sector and reducing the impact on affected landowners.”
The OWA is an independent non-profit organization that operates under the delegated legal authority of the Alberta Energy Regulator (AER). The mandate of the OWA is to safely decommission orphan oil and gas wells, pipelines and production facilities, and restore the land as close to its original state as possible. Funding for the OWA comes primarily from the upstream oil and gas industry, through annual levies administered by the AER.
For further information about the OWA, please click here.
