1. British Columbia Oil & Gas Development British Columbia Oil & Gas Development Strategy for the Heartlands (OGDS) Strategy for the Heartlands (OGDS) “ “ Making British Columbia the most competitive oil and Making British Columbia the most competitive oil and gas jurisdiction in North America” gas jurisdiction in North America”
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1. British Columbia Oil & Gas Development Strategy for the Heartlands (OGDS) “ Making British Columbia the most competitive oil and gas jurisdiction in.
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1.
British Columbia Oil & Gas Development British Columbia Oil & Gas Development Strategy for the Heartlands (OGDS)Strategy for the Heartlands (OGDS)
““Making British Columbia the most Making British Columbia the most competitive oil and gas jurisdiction in North competitive oil and gas jurisdiction in North
America”America”
British Columbia Oil & Gas Development British Columbia Oil & Gas Development Strategy for the Heartlands (OGDS)Strategy for the Heartlands (OGDS)
““Making British Columbia the most Making British Columbia the most competitive oil and gas jurisdiction in North competitive oil and gas jurisdiction in North
America”America”
2.
BackgroundBackground
Premier and ministers met with CAPP in January 2003.
Agreed to short-term action plans and longer-term visions.
OGDS was announced in June 2003.
Additional initiatives were announced in November 2003.
3.
OGDS Action PlanOGDS Action Plan
Four key pillars:
Roads Royalties
Service Sector Regulation
4.
RoadsRoads Comprehensive infrastructure vision.
Promote better access to resources through improved road infrastructure.
Consideration given to the economic benefits of resource development.
Immediate opportunity for the Sierra Yoyo Desan (SYD) Road in NEBC.
5.
SYD Road
6.
Public Private Partnership (P3).
Government / Industry Funded.
Long term solution, 15-years.
Net rates stay the same.
December 2003 transition.
Proposal ConceptProposal Concept
7.
Lower costs. Longer season. Acceleration of programs. Summer drilling ties in gas for winter
prices. Increased industry and provincial
revenues.
BenefitsBenefits
8.
Project MilestonesProject Milestones
1. Agreement in Principle with Road Users – Completed
2. Treasury Board & Cabinet approval – Completed
3. Establishment of the new governance structure –
Completed
4. Joint Management Agreement – with Stakeholders for
Signature
5. Procurement of a P3 Partner – Closes Nov 28, 2003
6. Transfer of Management – Dec 1, 2003
7. Finalize and sign 15-year Concession Agreement ~ Jan
2004
9.
Infrastructure VisionInfrastructure Vision SYD is one immediate example. Broader infrastructure vision
encompasses: Multi-season capacity Coordinated effort Multiple users Government contribution
$30 Million Royalty Credits Annually.
10.
11.
Regulatory StreamliningRegulatory Streamlining MEM and the OGC targeted regulation
reductions. OGC Act, P&NG Act and Pipeline Act
rewrite – single legislation, results based.
Regulatory Best Practices - reduction, harmonization and streamlining across government to support oil and gas development.
Midstream Strategy.
12.
Service Sector StrategyService Sector Strategy
Service Sector Strategy initiated to identify those elements that support and/or challenge business growth
Two pronged approach:
1. Identify and prioritize issues, and
2. Develop and execute work plans to deliver upon recommendations
13.
Service Sector Strategy – next stepsService Sector Strategy – next steps Created Service Sector Strategy
Committee Implement Service Sector Strategy
Recommendations $500K Skills Development
Partnership Capitalize on advantages
Cabinet Approval granted Nov. 14/03
14.
RoyaltiesRoyalties Royalties targeted to opportunities:
DeepDeep ExplorationExploration
Marginal Marginal Play DevelopmentPlay Development
SummerSummer Expanding the Drilling Expanding the Drilling SeasonSeason
UnconventionUnconventional and New al and New BasinsBasins
New Resource New Resource OpportunitiesOpportunities
15.
Deep Royalty Program ModifiedDeep Royalty Program Modified New Deep Royalty Program Modified based on
spud date between November 30, 2003 and July 1, 2008.
New Deep Royalty Program Modified based on the principle of ‘Measured Depth to Top of Pay’
Previous Deep Royalty Program valid for wells spud between June 30, 2003 and December 1, 2003.
Previous Deep Royalty Program was based on the principle of ‘True Vertical Depth to Top of Pay’.
16.
ProducingFormation
TrueVerticalDepth
Qualifier2500m
Pool
Pay
Measured Depth toTop of PayWell
GroundWell head
Table Depth = “Measured Depth to Top of Pay”
Deep Vertical Wells
17.
ProducingFormation
TrueVerticalDepth
Qualifier2500m
Pool
Pay
Measured Depth toTop of Pay
Well
GroundWell head
Table Depth = “Measured Depth to Top of Pay”
Deep Directional Wells
18.
ProducingFormation
TrueVerticalDepth
Qualifier2300m
Pool
Measured Depth toTop of PayWell
GroundWell head
Total Measured Depth
Horizontal Length = “Total Measured Depth” less “Measured Depth to Top of Pay”
Table Depth = “Measured Depth to Top of Pay” plus “X% of Horizontal Length”where “X%” varies from 10% to 30% and is called the Horizontal Length Factor