2017 Harvest

2017 Harvest

Friday, January 6, 2012

Sarg Oils Limited well abandonment saga continues

Professor Nigel Bankes of the University of Calgary has posted a comment on a recent review decision by the Energy Resources Conservation Board (ERCB).  The decision relates to a failure by Sarg Oils Limited to pay the costs of abandoning oil and gas wells in Alberta.  Sarg had failed to abandon the facilities itself, so the ERCB conducted the abandonment and then sought to recover its costs from Sarg.  Bankes points out the possibility that the Orphan Well Fund may end up having to cover costs of further abandonments.  He notes that, although the oil and gas industry is supposed to cover the cost of the Fund, the Alberta government injected $30,000,000 into the Orphan Fund as part of a package of incentives for the energy industry in 2009.