Canada: Alberta's delayed fund dispersal for oil clean up results in slow boost in oil and gas sector

The Alberta government received up to $30,000 from the federal government in April and had initially offered to fund the full amount to clean up a well to reduce the environmental risk associated with having so many wells lying idle.

With oil and gas industry producers competing for the government funding, they had stopped spending any of their own money to clean up wells resulting in the wells being dried up completely and reversed what the stimulus program was meant to achieve.

During the first phase of Alberta's program launched on May 1, Scott Darling, president of Calgary-based Performance Energy Services and Production said he had seven people working on submitting applications, including himself.

But with the rise of applications to about 2,800 over a few weeks, Darling received four approvals and 126 rejections resulting in the freezing of the industry.

So far, the Alberta government said it has approved about $64 million in applications for its $1 billion well clean up program.

There is a concern that Alberta's program may not provide an immediate boost in the activity for the oilfield service sector because when an application is approved, the company has until the end of 2022 to complete the work.

In addition, those in the industry say there are delays when different applications for the same well are processed at different times.  

(Reporting by Asha Bajaj)