Accelerated Site Closure Program (ASCP) Questions and Answers

Ministry of Energy and Resources

Accelerated Site Closure Program (ASCP) Questions and Answers

(Updated January 21th, 2021)

Thursday, January 21, 2021 2

Contents

Disclaimer ........................................................................................................................................ 3

Definitions ....................................................................................................................................... 4

ASCP Program Overview Questions ................................................................................................ 4

Licensee - Eligibility Questions ........................................................................................................ 6

Licensee - Site Nomination Process Questions ............................................................................... 7

Licensee - General Questions ....................................................................................................... 10

ASCP Program - Administration .................................................................................................... 15

Service Company - General Questions ......................................................................................... 18

Phase 2 Program Update .............................................................................................................. 26

Landowner – Site Nomination Process Questions ........................................................................ 28

Indigenous Participation ............................................................................................................... 30

Indigenous service companies .................................................................................................. 30

Indigenous Business Credit Pool ............................................................................................... 34

Licensees Receiving an Allocation ......................................................................................... 35

Licensees Applying for the Credit Pool .................................................................................. 36

First Nations Stewardship Fund ................................................................................................ 37


Disclaimer

The Ministry of Energy and Resources reserves the right to update and/or clarify content in this document as necessary. Please check back regularly for the latest version. Updated questions and responses will be identified in subsequent versions.


Definitions

Lead contractor – Refers to the contractor that completes the engineering work and abandonment program design. Typically, this function is carried out by the licensee. However, in situations where a work package contains wells from multiple licensees, or where the licensee does not have this capacity in house, the program, together with the licensees, may secure a lead contractor.

Major Contractor – Refers to a service provider who can fully perform all service aspects under one or more of the 13 scopes of work, as defined by the Ministry of SaskBuilds and Procurement RFSQ process and who generally is responsible for assembly of the sub-contractors and oversight of the work.

Minor Contractor – Refers to a service provider who cannot fully perform all service aspects under one or more of the 13 scopes of work, as defined by the Ministry of SaskBuilds and Procurement RFSQ process.

Work packages – Refers to the grouping of wells and/or facilities for abandonment and/or reclamation assembled by the Saskatchewan Research Council (SRC).

ASCP Program Overview Questions

1. Why did the federal government provide $400M to Saskatchewan to clean up inactive

and orphan oil and gas wells?

The federal government provided this funding as a way to stimulate activity and employment in the struggling oil and gas sector. While the funding is targeted towards the oil and gas service sector, licensees will benefit by having their liabilities retired, improving their balance sheets.

2. How long will the ASCP run?

The program is slated to run until December 31, 2022.

3. Why only $100M in the first funding release?

This amount accomplishes the objective of getting money into the sector in the near term and allows for program adjustments for future funding phases.

4. Why are you excluding licensees in the first $100M?

Licensees excluded from the first phase of funding are those that are ineligible due to amounts owing to the Crown. Crown debts include:

Amounts owing for the Oil and Gas Administrative Levy;


Amounts owing for the Orphan Well Levy;

Amounts owing for Crown oil and gas royalties;

Amounts owing for Crown mineral disposition rentals; and

Amounts owing for Crown surface lease rentals.

5. How long is the Phase 1 funding and nomination process?

The ASCP will be rolled out in several phases. Phase 1 will allocate up to $100 million in funding to Saskatchewan service companies contracted to do abandonment and reclamation work. Licensees will be allowed to nominate projects throughout all phases of the program as long as they have unspent funding allocations.

6. Why is there ineligibility for those who owe amounts to the crown and municipalities?

It is the responsibility for licensees to be in good standing with amount owing to the Crown for levies, royalties and rentals. Federal government terms for the funding also require that funds for the clean-up of inactive wells and facilities be preferred to licensees who are in good standing in relation to the payment of applicable municipal taxes.

7. Why is there a March 1, 2020 cut-off for these amounts owing?

This is in recognition of the introduction of operational impacts due to the Covid-19 pandemic and the collapse of oil prices that occurred in March 2020.

8. Are pipeline abandonments covered under the program?

No, only oil and gas wells and associated flowlines and facilities are eligible. Flowlines are the pipes that connect wells to upstream facilities such as batteries. Flowlines may also connect an upstream facility to an injection well. Pipelines are further downstream and therefore are primarily licensed transmission pipelines.

9. Will the program cover wells under the Orphan Program?

The first phase of funding is focused on inactive wells, facilities and related infrastructure. Currently, the Saskatchewan Orphan Well Fund is effectively managing the cost of reclamation and abandonment of orphaned wells and facilities.

10. How much money is anticipated to be released in the second phase?

At this point the number of phases and amount of funds released per phase has yet to be determined. Future phase and funding levels will depend on results and learnings from this initial phase and industry capacity.


11. What is planned to support Indigenous participation in the program? (Updated

November 9th, 2020)

The ASCP has made a commitment to direct up to $50M in funding to support on-Reserve program work and to support the participation of Indigenous-owned oil and gas service companies. The ASCP has established a First Nations and Metis Working Group to engage with Indigenous leaders with respect this commitment and broader aspects of the program. Outside of this commitment, projects on Reserve lands are eligible under the same criteria as the program generally, and Saskatchewan-based Indigenous-owned service companies have already been working within the program.

12. Where can I find the presentation of July 7, 2020 to licensees on the program?

The slides can be found at ASCP Program Licensee Information Session.

Licensee - Eligibility Questions

13. Am I an eligible licensee?

In Phase 1 of the ASCP, eligible licensees are licensees who were in good standing in relation to debts owing to the Crown as of March 1, 2020. For the purposes of eligibility under ASCP, Crown debts include:

Amounts owing for the Oil and Gas Administrative Levy;

Amounts owing for the Orphan Well Levy;

Amounts owing for Crown oil and gas royalties;

Amounts owing for Crown mineral disposition rentals; and

Amounts owing for Crown surface lease rentals.

14. How/when will I know how much I am eligible for?

Funding allocations for eligibility licensees for phase 1 were issued via email to licensees on June 1, 2020 and are now posted on the ASCP website. If you believe you may have been eligible, please contact the ER Service Desk at 1-855-219-9373 or [email protected] for follow-up.

15. If a licensee acquires/divests liabilities during or between funding phases, will the

liability allocation be transferred?

It would be ER’s intent to not allow the transfer of nominated sites during the program. However, consideration could be given based on the circumstances. For each funding phase, individual companies and industry liabilities will be restated. Transfer of infrastructure that has not been nominated would be allowed and in those instances the corresponding funding allocation would transfer with the liabilities.

https://publications.saskatchewan.ca/#/products/106739

mailto:[email protected]


Licensee - Site Nomination Process Questions

16. What is the process for my company to nominate our projects?

Details are on the nomination process can be found in the following places:

1. On-line training module - https://training.saskatchewan.ca/EnergyAndResources/liability-management/index.html.

2. ASCP Nomination Process Supplemental Information Guide

3. Once you have reviewed the above materials, access to the ASCP nomination process can be obtained in IRIS via navigation to Applications> Accelerated Site Closure Program> Accelerated Site Closure.

17. It has been mentioned that you would like licensees, as much as possible, in Phase 1 to

nominate routine wells. What do you mean by routine?

The expectation is that licensees, as much as possible nominate projects that they expect to be routine from a regulatory standpoint in order to reduce the workload for ER in terms of processing abandonment and AOR applications. Given that many abandonment applications trigger non-routine application reviews (e.g. well proximity to another well), if non-routine applications are being nominated, the licensee should primarily nominate infrastructure projects in Phase 1 where there are no known or expected issues that will result in delays in completing the project or where there is expected significantly higher costs for abandonment and reclamation. Regardless of whether a nominated project falls into a “routine” or “non-routine “ IRIS review process, the expectation is that licensees will nominate infrastructure projects where the expectation is that the work can be done quickly and in-line with expected costs.

18. On a well that has been already fully downhole abandoned, is the cut & cap applicable

to this program?

Yes, as long as that portion of the work has not been completed or started prior to it being included in an SRC approved work package.

19. For such a well, is infrastructure removal on the surface, along with reclamation &

remediation also covered?

Yes. Note that a maximum of 10% of a licensees’ funding eligibility can be used for remediation of designated problem sites.

https://training.saskatchewan.ca/EnergyAndResources/liability-management/index.html




20. On a well that has been zonally abandoned, would any up-hole remedial work for

ground water protection concerns be considered applicable to this program as long as it

is being completed as part of an area-based program?

Yes, as long as that portion of the work has not been completed or started prior to it being included in an SRC approved work package.

21. Would crop loss or damages be considered part of the funding in the event the work

requires “off-lease” access for staging of equipment, etc.?

No. Compensation for loss of use caused by a land disturbance is considered a private matter between the landowner and the licensee.

22. In regards to wells you initially nominate can you later substitute those wells/remove or

add wells?

Since you can over-nominate your wells to 125%, this provides you with a means to substitute wells. If you decide to remove wells or add wells at a later date you can as well. If you wish to add projects, you will need to submit those projects through the nomination process. To remove projects, you can do so through conversations with the SRC when they contact you in regards to work packages they are working on that may include your nominations.

23. What is a work package contract? Do we need a work package contract in place before

we begin work in order for that work to be paid for by the program? (New – November

9th, 2020)

A work package contract is, essentially, a funded scope of work that is developed and executed between the SRC and the eligible licensee(s). The work package contract specifies the program work that will be completed for a given package of licensee nominated wells, flowlines, facilities, and sites. Yes. Executing a work package contract with the SRC is the first step in completing eligible program work. If work is completed prior to having a work package contract in place with the SRC, it will not be eligible for ASCP funding.

24. Once we have a work package contract executed with the SRC, can we make changes to

the scope of work (i.e. substitute wells/facilities/flowlines) as the work progresses?

(New - November 9th, 2020)


In order to maintain positive program flexibility and provide greater definition for Section

3.1.9 of the Work Package Agreement, SRC has developed change direction templates for

use within the program. These change direction templates will be sent out to licensees.

25. What if my preferred service supplier does not show up as an option during the

nomination process?

If this is the case, the service supplier may not have prequalified under the SaskTenders process (https://sasktenders.ca/content/public/Search.aspx (Comp #7710A)) or may not have applied. You may wish to ask your preferred supplier to engage in that process and wait for that to complete prior to attempting the nomination again or you may wish to proceed without selecting a preferred supplier for this particular project nomination.

26. Can you please confirm how we will be able to nominate locations that don’t have a

license #? I.e. Built & not drilled locations that require final DSA.

In these instances, ER will retrospectively licence the sites and provide you with a licence number.

27. Can a site be nominated for a DSA and AoR at the same?

Yes.

28. Can a site be nominated for the same activity multiple times throughout the different

phases of the ASCP program?

Not at this time. The system will only allow for a site to be nominated for the same activity once.

29. Is it imperative that an engaged contractor has an assigned BAID number before we

nominate them when doing a submission in IRIS?

No, but it is preferable.

30. If we are using an Environmental Consulting company as site supervisor, do we need to

identify all service companies that will be working on the site or do we just identify the

environmental service company that will 3rd party everything through them?

No, just the environmental service company.

31. Will a new preferred vendor upload overwrite a previous upload, or will a new upload

be added to a previous upload or list?

The template for the identification of preferred service providers (ASCP Vendor template)

https://sasktenders.ca/content/public/Search.aspx

https://publications.saskatchewan.ca/api/v1/products/106516/formats/119147/download


can be revised and uploaded at any time. This will overwrite the existing template so you will want to make sure it includes all the vendors you wish to identify.

32. How do we differentiate our preferred vendor list by area or do we just have one

preferred vendor list for all areas?

At this time the form does not allow for this. However, SRC will look to engage your preferred vendors based on their geographic location.

33. Once wells have been nominated and approved, do licensee's then have to submit an

Abandonment Application through IRIS for each well that is nominated?

Submit the abandonment applications prior to going through the nomination process.

Licensee - General Questions

34. Do licensees still need to follow all the existing applicable Regulations and Directives for

wells and facilities abandoned and reclaimed under the ASCP?

Yes. All the existing rules remain in place and licensees are expected to ensure that all the procedures for proper abandonment and reclamation are followed. Licensees also remain responsible for all submission of all reporting requirements and applicable update into IRIS.

35. What if I have a contract in place with an Alberta contractor?

This is considered a stimulus program to get Saskatchewan-based oil and gas service companies working. Only work contracted with Saskatchewan-based companies will be eligible for funding. Depending on the Saskatchewan service industry’s ability to absorb all the work over the next 2.5 years, the ASCP may need to examine the potential to use out-of-province service providers in the future.

36. Would it be possible for larger companies with internal capabilities to complete our

own project management and service company selections, acting as lead contractor on

our projects, as long as all of our suppliers meet the “pre-qualification” process?

Yes. Licensees can act as the lead contractor. A contract agreement with the SRC will spell out the details and requirement of this arrangement. Note that all payment will be made directly to service companies and not to licensees.

37. It has been suggested that having 10-30 well/site projects would be considered

sufficient for the purpose of this program, so if a licensee were to nominate projects of

this size or even larger, would it be possible for us to simply complete back to back

projects in areas with the same suppliers in order to increase our efficiencies in those

areas?


Licensees should nominate projects that they would consider as project size under their regular course of business. Nominations should be done in consideration of their available funding allocation for each phase. There currently is no specific upper or lower project limit cap. SRC will be looking to coordinate work packages in a way that reduces mobilization and demobilization costs. In this scenario, it may very well be that multiple work packages are staged in a way that allows a second package to begin right after the first is complete.

38. How will the licensee ensure the service companies provide an appropriate level of:

Health and safety performance and adhere to licensee’s H&S policies

Communication to the licensee to coordinate appropriate integrated

abandonment work (e.g. abandoned well and flowline into an operating facility)

Technical oversight to ensure future legal liability is appropriately managed

Cost control to ensure the licensee’s portion of the funding is maximized to

create jobs and reduce deemed liability.

Licensees remain in charge of their sites and have oversight of contractors working on those sites. Expected project costs are outlined in the work package agreement and cost monitoring will be done by the SRC with communication to occur between the SRC, service companies and licensees to ensure projects come in on budget.

39. How is the focus on Sask-based companies/contractors going to work in the event we

have already completed all the work leading up to a DSA/AOR with a vendor based out

of province? (Updated November 9th, 2020)

This is considered a stimulus program to get Saskatchewan based oil and gas service companies working. Saskatchewan based companies/contractors should be used. However, depending on the complexity of the remediation work that took place, in some cases it may be warranted to use the original contractor if their knowledge and understanding of the site is necessary to complete subsequent phases of the work or will result in significant cost savings over selecting a different contractor. However, the program will not pay for work conducted by non-approved ASCP vendors.

40. There are certain types of “out of province” vendors that are actually closer in proximity

to specific work sites. Enforcing the use of in-province vendors could end up costing the

licensee significantly more to complete work – could there be exceptions made in these

circumstances?

This is considered a stimulus program to get Saskatchewan based oil and gas service companies working. Saskatchewan based companies/contractors should be used.


41. Many Sask-based services (e.g. analytical labs) may not have the capacity to handle all

the work. What will be the provision if those services are not available?

This is considered a stimulus program to get Saskatchewan based oil and gas service companies working. Saskatchewan based companies/contractors should be used. If the services are not available, other options could be explored only with prior approval. Additional details on this will be confirmed in a future update.

42. Why can’t the licensees control the payments?

Federal government terms for the funding specify that funds must be paid to service companies. The ASCP program is designed to get money into the hands of the service industry quickly. The processes that are being developed will see that contractors are paid on a schedule commensurate with the degree of work completed.

43. In the event that the licensee does not accept some of the work package contracts,

would those funds end up back in the “pot” or would additional consideration be given,

due to the large scale of our projects, to ensure we get access to our preferred vendors?

If the licensee does not provide sign-off of the work package the funds do not go back into a “pot”. The licensee will retain their funding eligibility based on the nominated liabilities that were in the package. That funding eligibility may be consumed by additional or other liabilities that the licensee nominates. Where possible, consideration will be given to a licensees preferred vendors.

44. At what stage(s) in the process will contracts be required between the service company

and the licensee – I assume once the work packages has been created and sent out for

approval?

There are two likely scenarios that are expected. Case one is that the licensee acts as the lead contractor and case two is that a third party acts as a lead contractor. For case one, SRC will assemble work packages (scope of work) and enters into an agreement with the licensee. The licensee will then contract with suppliers identified in the work package (which may be preferred suppliers if they are available) In case two, SRC will assemble work packages (scope of work) and enters into an agreement with the licensee(s) and the lead contractor. The lead contractor will then contract with additional Sask-based suppliers identified in the work package.

45. Are there any specific requirements/omissions that need to be adhered to in the

structure of the contract?


Details will be provided in the contract agreement.

46. Can we use our contracted well site supervisors since we have developed procedures to

ensure cost effective execution of are based programs? (Updated November 9th, 2020)

Yes. As much as possible, consideration should be given to Saskatchewan-based well-site supervisors. So long as these well-site supervisors are approved vendors under the ASCP, the program will cover those costs.

47. If we are working with an approved vendor under the ASCP, who acts as an

intermediary to secure other vendors to complete program work, do those other

vendors also need to be program approved? (New - November 9th, 2020)

Yes. Where subcontracted vendors are providing a major service type, as defined by the program (i.e. in this document and in the RFSQ), on behalf of an approved vendor, those subcontracted vendors are also required to be program approved. Where the subcontracted vendors are not providing a major service type, as defined by the program, those vendors will not be required to be program approved, but will be required to be Saskatchewan-based (as per the ASCP more broadly).

48. How will a Licensee who is a lead contractor handle services like Hotshot, KCL kill fluid,

etc. that are required during the job but not planned for? Can the invoice be submitted

at the end of the job without a work package contract?

The work package contract will allow for the use of such services as required.

49. A licensee has a 30 well program at $50K per well (total $1.5M). The work is done in

September and the licensee is under spent on their allocation by $100K - what becomes

of the under spent allocation? Can the Licensee use it in future phases? Can the Licensee

add wells to the existing program to use up his allocation for that round?

Licensees can continue to nominate wells in a phase to utilize all their funding allocation. If the licensee no longer has any infrastructure that needs reclamation or abandonment, ER may look to re-allocate unused funds to other licensees based on the Phase 1 funding principles or may carry those funds for allocation into Phase 2.

50. If a licensee underspends their allocations as of December 31, 2022 what becomes of

the under spent allocation?

Any unspent money in the program as of December 31, 2022 will need to be returned to the federal government.

51. What is meant by the reference to nominating wells and facilities up to 125% of a

licensees funding allocation?

125% refers only to the ability to nominate inactive infrastructure projects in excess of


your funding allocation for the phase and is based on Licensee Liability Rating deemed liability. For example, if a licensee has an allocation of $100,000 which is in the range of two wells sites @ $50K each, the licensees could nominate up to 3 sites. This allows for some flexibility in managing wells/facilities to support area-based closure or in the case where a well/facility needs to be pulled from the program phase. At the end of the day, the intent is to manage spending up to the maximum funding allocation. The intent is to provide some flexibility to form well/facility packages but also not to overwhelm the system with nominations for every possible well/facility. Licensee nominations should be done in terms of licensee priorities for abandonment and reclamation.

52. All service rigs are made differently. Some have cement units integrated in their design.

Others come with electric wireline instead of a sand line. If our preferred vendor’s

service rig has all these features, and in the event that our preferred vendor is

unavailable, will we be required to use a service rig that does not have all the features?

Where possible preference will be given to preferred contractors. Sask-based service company and service company availability will be key considerations.

53. Who chooses Phase II Environmental Site Assessment drill sites?

The licensee will have ultimate control over specifying how Environmental Site Assessment work is carried out on their sites. The SRC, the Ministry of SaskBuilds and Procurement and any contractors will not have any involvement in these decisions.

54. Will evidence or confirmation of payment from SRC to the vendors be provided to the

licensee?

Details on this process will be included in the agreement.

55. What do licensees need to provide the SRC with in terms of reporting? (New –

November 9th, 2020)

In order to help facilitate the reporting needs of the program and be in compliance with Section Three of the executed Work Package Agreement, SRC’s project team has developed a template that will be sent out to the licensees (forthcoming). SRC requests that the licensees complete this template no later than the fifth day of the month after the reporting period month end. For the social-economic reporting, the program suggests using information presented in Section Four of CAPP’s November 2013 Health and Safety Performance Reporting (forthcoming with reporting template). This will help provide consistency across licensees and for the program when calculating jobs created and jobs maintained. More specific information will be sent to you by SRC for monthly reporting as well as a template for you to fill in five days after the month end.


56. Are licensees responsible for reviewing invoices from contractors before sending them

to SRC? (New – November 9th, 2020)

Yes. For the Major Contractors that the licensees choose to utilize on their packages, we request the licensees request from the Major Contractors costs and rates as provided to the Ministry of SaskBuilds and Procurement (SBP) in the Stage II RFSQ proposal. This will help the licensees validate and sign off on the contractor’s invoices prior to being send to SRC for payment. SRC will also check invoices to make sure the rates presented match the rates put forward by the Major Contractors in the SBP proposal prior to payment. We ask that licensees clearly message to their chosen Major Contractors that their invoiced rates MUST align with their SaskBuild’s RFSQ Stage II proposal rates.

57. Site Supervisors are typically on a rotation to ensure we keep our main supervisors

employed to some level during these slowdowns. Do Site Supervisors also have to bid

on these packages or are you going to allow Licensees to manage our site supervisors as

per normal?

In general, site supervisors will need to be pre-qualified through the RFSQ process. As part of this process, site supervisors will be asked to provide their service rates for consideration in the formation of work packages. Note: Licensees may utilize site supervisors that are not pre-qualified through the RFSQ process. However, the ASCP may not cover their costs. These details will be part of the work agreement discussion between licensees and SRC. Licensees will remain in control of their sites but will be expected to utilize site supervisors that are identified in the project work package for that project.

ASCP Program - Administration

58. What is the role of ER in this program?

ER has primary responsibility for the operations of the program and program spending. ER will develop program eligibility criteria and set out other critical program design parameters including how funding will flow to service providers and how funding will be rolled out over time. ER will also manage the intake of wells and facilities nominated by licensees for abandonment and reclamation using its liability management system in IRIS, which can be leveraged to provide a simple and efficient administrative process.

59. Why contract a third-party to administer aspects of the program when industry can do

much of this on their own?

ER does not have the capacity internally to administer this scale of program. The Saskatchewan Research Council (SRC) has demonstrated expertise, including managing the CLEANS program for northern Saskatchewan uranium site clean-up.


Using the proposed administration model will drive program efficiencies. The Government of Saskatchewan anticipates the following benefits from the service delivery model for this program:

The system is simple and fast, getting funded wells and facilities to industry quickly, while allowing for strategic area-based closure projects.

Allows economies of scale to be achieved with a focus on work packages, reducing mobilization-demobilization costs, getting more money into the system faster, while ultimately encouraging efficiencies and cost reduction

All industry stakeholders represented (and have a say) at key points in the process

Utilizes industry standard contracting, warranty, reporting practices, site safety and liability processes.

Service companies and licensees are incentivised to ensure that high quality work is done because they maintain regulatory, liability and warranty ownership.

60. How big a bundle of work will be packaged by the SRC?

This will be determined on many factors including but not limited to:

ability to leverage area-based closures

physical locations of wells and facilities

service company capacity to complete the work

project complexity

timelines

estimated costs & budget

61. Is the SRC planning to (or is it necessary to) complete the work packages process on ALL

nominated sites?

SRC will be asked to examine nominated wells and facilities from a licensee in conjunction with other nominated wells and facilities in the area. In early stages, it may make sense for some ready-made packages of wells and facilities proposed from a licensee to form the complete the work. What we want to avoid is having wells and facilities stranded in areas where they could more efficiently and effectively be in included in a work package. SRC will be asked to do their best to avoid those types of situations.

62. How will middle reclamation/remediation activities be handled? I understand how the

abandonment activities will work, but if there are sites are at any other stage, how will

these be handled?

Any work that was completed prior to the program launch date will not be eligible. However, sites that are at any stage of the abandonment and reclamation cycle will be eligible in the program. Like well and facility sites, the SRC will seek to bundle reclamation and remediation activities into an efficient package. This could include pairing a site that needs to be remediated with site requiring abandonment. In these cases, to drive efficient


use of resources, the remediation work for the package can be conducted simultaneously once the well/facility sites are abandoned.

63. You indicated that “the program will make every effort to facilitate the licensee’s use of

preferred contractors, although it may not be possible in all circumstances.” What are

some of the situations that would preclude the use of a preferred contractor?

Preferred contractor is not available.

The area-based closure objective results in work packages containing multiple licensee’s wells/facilities and the package is assigned to an eligible contractor that is not the preferred contractor for one of the licensee.

64. In general, how is the SRC engaging with the Orphan Program to assist them in area

programs even if they are not funded by the ASCP?

For purposes of Phase 1, no Orphan Well work is being completed as a part of, or in conjunction with, the ASCP program. Orphan wells could be added to work packages but this work would need to paid for out of the orphan fund rather than the ASCP funding. This would only be considered if cost savings could be demonstrated as a result since orphan expenditures are paid by industry through the orphan levy.

65. A company has a 10 well abandonment program with an estimated cost of $50K per

well for $500K total and the wells actually cost $60K. Can a licensee stop at 8 wells (cost

$480K) and not do the last 2 wells in order to stay within the program total estimated

cost?

Yes. SRC/ER will be monitoring the spend of each licensee’s allocation to ensure that we minimize any phase funding allocation overruns.

66. How are cost overruns handled? Does the Licensee have to pay for cost overruns or is

the 125% meant to handle cost overruns?

The 125% is not meant to handle cost overruns. As noted, the 125% does not apply to the actual spend, only the ability to nominate deemed liabilities in excess of your allocations. It is anticipated that cost overruns in one phase of the program will reduce funding eligibility proportionately in the subsequent phase. At the end of the final phase of the program or when a licensee no longer has funding eligibility, any cost overruns will need to be paid by the licensee.

67. The SRC is administering the program. Will they be excluded from providing services

under the program (ex: environmental chemistry)?


Yes, the SRC will be excluded from providing services under the program.

Service Company - General Questions

68. What are the criteria for being designated an eligible service company?

To be eligible under the program, service companies will have to be Saskatchewan-based, meet some basic legitimacy criteria and have the capacity to conduct the work, or the specific subset of the work, set out by the SRC and the licensee in the work package.

69. How do I know if I am considered a Saskatchewan-based service company? (Updated

November 9th, 2020)

Service company eligibility will be determined using the RFSQ posted on SaskTenders https://sasktenders.ca/content/public/Search.aspx (Comp #7710A). Eligible companies must be Saskatchewan-based, meaning:

Being located in Saskatchewan;

Employing Saskatchewan people (85% of work force commitment for ASCP work);

Paying Saskatchewan taxes; and

Sourcing their supplies from Saskatchewan-based businesses based upon capacity, quality and availability.

As part of the RFSQ, prospective service companies will be required to submit the appropriate information to show that they meet the above criteria.

70. Are there any other criteria that service companies must meet to be eligible under the

program?

There will be some other basic criteria that service companies must meet to be eligible under the program. This includes that the service company:

Employ and keep current all safety programs or safety management systems;

Maintain a minimum of $2,000,000 Comprehensive General Liability Insurance;

Maintain a minimum of $1,000,000 Automotive Liability Insurance;

Be registered with the Workers Compensation Board (WCB); and

Where applicable, hold a valid Saskatchewan or home province Certificate of Recognition (COR) or Small Employer Certificate of Recognition (SECOR).

Note – the program may consider alternatives to the COR and SECOR requirements in the

event that a licensee is satisfied with the alternative.

Service companies who qualify under the RFSQ will also be required to complete a subsequent qualification process involving the submission of pricing and additional



qualification information to the SRC. Details will be provided to companies who qualify under stage 1.

71. Are there technical requirements that have to be met to become eligible?

Technical competency will be assessed when the SRC assembles a package of work to be awarded. Before work is awarded, licensees with wells and facilities in the work package will be required to provide sign-off. The program will rely on the expertise of licensees to ensure that eligible service companies have the capacity to undertake the scope of work. This process may be iterative in nature.

72. How do I apply to become an eligible service company under the program? (Updated

November 9th, 2020)

On June 15, 2020 a Request for Supplier Qualifications was posted on SaskTenders for the ASCP program. https://sasktenders.ca/content/public/Search.aspx. (Comp #7710A) Not everyone will need to respond to the RFSQ. Only those companies that are primarily responsible and accountable for delivering the overall work in one of the 14 major service types laid out in the RFSQ need to respond to the RFSQ. You will need to carefully review the RFSQ and then determine whether responding is the appropriate step for your business. The 14 major service types in Well Decommissioning and Remediation/Reclamation are: 1. Service Rig 2. Wellsite Supervisor 3. Engineering/Project Management 4. Coil Tubing 5. Wireline 6. Fluid Hauling and Disposal 7. Cut and Cap 8. Pressure Testing 9. Cementation and Service Maintenance 10. Downhole Tools 11. Initial Environmental Assessment (i.e. Phase 1) 12. Detailed Site Assessment 13. Environmental Contracting (i.e. Heavy equipment, transport and waste disposal) 14. Reclamation/Remediation Regulatory and Abandonment Process Applications. If your business supports these service areas rather than directly delivering them, you do not need to respond to the RFSQ. Providing subcontracting work in the ASCP does require pre-qualification or response to the RFSQ. However, minor contractors are required to be Saskatchewan-based.

https://sasktenders.ca/content/public/Search.aspx.


Service companies who qualify under the RFSQ will also be required to complete a subsequent qualification process involving the submission of pricing and additional qualification information to the SRC. Details will be provided to companies who qualify under RFSQ stage 1.

73. What is the timing of the opening and closing of application periods for stage 1 of the

RFSQ? (New – November 9, 2020)

The RFSQ Stage 1 will remain open and allow companies to apply for pre-qualified status on an ongoing basis over the life of the ASCP in accordance with the timelines and deadlines laid out within the RFSQ package. Stage 1 submissions will be evaluated after each submission deadline outlined below: September 10, 2020 2:00pm Saskatchewan Time November 9, 2020 2:00pm Saskatchewan Time January 11, 2021 2:00pm Saskatchewan Time

Additional dates to evaluate RFSQ Stage 1 submissions are TBD.

74. Do I need a BA ID in IRIS to participate in the program? (Updated November 9th, 2020)

Only companies that provide the services listed above, and considered by the program as major contractors, need an IRIS BA Code. This code is generated by ER when a company qualifies through Stage 1 of the RFSQ process. Service companies do not need to apply for a BA code. If you offer subcontracting services and are not considered by the program to be a major contractor, you do not need a BA Code. Minor contractors are encouraged to reach out to providers of the above services or licensee to offer your services.

75. An abandonment program typically consists of a lead contractor (often the licensee

themselves), a site supervisor (an employee or contracted by the licensee), and a series

of contractors delivering the various services required to abandon and reclaim the site.

When the program talks about the need for service companies to apply to become

eligible under the program, who is that referring to?

The program intends to be flexible and, in the vast majority of cases, allow the work to be conducted using typical industry practices. In the limited situations where a small licensee does not act as its own lead contractor, the program will supply this function in collaboration with the relevant licensees. In cases where the licensee does act as its own lead contractor, the intent is not to disrupt this. Additional information on service company eligibility can be found at https://sasktenders.ca/content/public/Search.aspx. (Comp #7710A)

76. How will eligible service companies get access to work under the program?



Eligible licensees will nominate wells and facilities into the program through the Ministry of Energy and Resources. The SRC will bundle these wells and facilities into work packages to facilitate area-based closure. A pre-qualification process for some services is currently running and will remain open through the program at https://sasktenders.ca/content/public/Search.aspx. (Comp #7710A). Licensees will be able identified preferred service providers. If those providers meet pre-qualifications, they can be eligible for work under the program. Additional services not identified in the prequalification process can be contracted by lead contractors if they have the proper work and safety credentials and are Sask-based.

77. Will contractors be able to compete directly for work issued by the Saskatchewan

Research Council (SRC)?

An ongoing prequalification process can be found here: https://sasktenders.ca/content/public/Search.aspx. (Comp #7710A). Service companies who qualify under the RFSQ will also be required to complete a subsequent qualification process involving the submission of pricing and additional qualification information to the SRC. Details will be provided to companies who qualify under stage 1. Companies qualified under both processes will be granted consideration for inclusion as service providers for various work packages.

78. If my head office is in Alberta, but I have a satellite office in Saskatchewan and meet all

of the other eligibility criteria, am I considered a Saskatchewan-based service company

under the program?

Yes. Having a physical satellite office in Saskatchewan, provided that all other eligibility criteria are met, would make that company eligible under the program.

79. My company head office is on the Alberta side of Lloydminster, but I employ

Saskatchewan people and primarily work in Saskatchewan. Am I considered

Saskatchewan-based?

The test of eligibility will be a reasonable test. Lloydminster based companies are in a unique situation and would likely be eligible provided that all other eligibility criteria are met.

80. My company recently became incorporated in Saskatchewan. Will my company meet

the requirement for paying Saskatchewan taxes if we are registered to pay taxes going

forward?

Provided that the prospective service company meets all other program eligibility criteria, a recently incorporated Saskatchewan company that will pay taxes on a go forward basis would generally be considered eligible for the program.




81. Will all personnel working on-site doing work funded by the program need to be from

Saskatchewan?

Owing to the Saskatchewan-based eligibility criteria, it is likely that most personnel on site would be from Saskatchewan. The program will encourage contractors to use Saskatchewan labour wherever possible. The program may also establish thresholds for Saskatchewan-based labour. Additional information in regards to this question will be confirmed in a future update.

82. Once an eligible service company holds the rights to work under an SRC issued work

package, does the eligible service company need to contract with the licensee(s)?

Yes. Eligible service companies that are awarded a work package will still be required to contract with the licensee(s) under standard terms and conditions to perform the work. Under no circumstances will the Ministry of Energy and Resources, the SRC, or SBP get involved in contract negotiations or contracting terms between the licensees and the eligible service companies.

83. My company contracts directly with licensees to provide services. Will this program

allow for that type of relationship or will licensees be forced to work through a lead

contractor or consultant that is awarded the work by the SRC?

In many cases, the program will rely on a licensee’s in house lead contracting function to coordinate and carry out the work. The program aims to be flexible enough to allow this to occur, provided that it is consistent with program objectives and eligibility criteria. In some cases, delivering an area-based closure model may require the program to rely on a lead contractor to coordinate the work, particularly where multiple licensees have assets in the work package. In these cases, the contractors would work through the lead contractor in collaboration with licensees.

84. How will the work package awards be structured?

The work package awards will contain wells, facilities, and sites that are bundled to facilitate an area-based closure model. The packages may contain wells and facilities from a single licensee or may contain wells and facilities from multiple licensees. The work package will specify the wells and/or facilities, locations, the level of detailed work required per well or facility, the high level scheduling, the materials, and the cost and performance/quality metrics of the operations. The remaining terms and conditions would include payment terms, reporting requirements, and any other necessary matters to be determined.

85. When will the first work packages be awarded by the SRC?

It is expected that the first work packages will be awarded in the coming weeks. Phase 1


will look to leverage and quickly execute existing licensee abandonment programs and plans in a way that is consistent with program objectives. Additional information in regards to this question will be confirmed in a future update.

86. How will eligible service companies that are successful in securing a work package

award be paid for the work?

Licensees will work with the approved service contractors on how they would like invoices submitted. Service companies will submit invoices to the licensee, who will verify that the work has been completed. Those verified invoices will then be sent to the SRC to issue the payment directly to the service company. The program goal is to have payments to service companies completed within 30 days of a service company’s invoice submission to the licensee.

87. Is PST applicable on invoices?

Yes, the PST still applies and needs to be charged.

88. If I am a contractor working under a lead contractor, will I receive payment for services

in the same timely manner and schedule as lead contractors holding the SRC issued

work package?

The work package will set out that lead contractors must pay contractors in a timely manner. Failure to do so could impact future program eligibility of the lead contractor. The program is expecting that payments made to service providers will be made within 30 days of competition of the work.

89. If I hold an SRC issued work package that must be complete on a specified budget, what

happens if I run into a “problem” well – one that was thought to be routine, but turns

out to be more complex with a much higher cost?

These situations will need to be dealt with on a case-by-case basis through conversation between the licensee and SRC. The licensee’s available funding allocation may impact this decision. In general, the eligible service company will work with the licensee to get the “problem” well into a safe and stable state. If that can be achieved, the well may be removed from the scope of work and returned to at a later date. If a safe and stable state cannot be achieved, the eligible service company and licensee can make a request to the SRC for additional budget to fully address the well or site.

90. What reporting requirements will be associated with the work package contracts?

The reporting requirements will be determined as the work package award process is developed by the SRC. Additional information in regards to this question will be confirmed in a future update.


91. I saw that licensees will be able to select preferred contractors – what if I am not

identified by any licensees as a preferred contractor?

While the program will make all reasonable efforts to match preferred contractors with licensees, there will be circumstances where the program is unable to do this. To drive area-based closure and other program objectives, there will be work for eligible SK-based service companies, regardless of whether or not they have been identified as a preferred contractor.

92. If a contractor makes too many mistakes on site, will the licensee be able end their

relationship with that contractor and have the SRC issue the rest of the work package to

another lead contractor?

Yes. The program does not intend to force licensees to work with contractors who are unable to effectively complete the work. Provided that appropriate justification is provided – ex: within the standard contracting terms - the SRC would look to revoke the work package and re-issue to another suitable contractor.

93. I have not previously done abandonment and reclamation work in the oil and gas

industry, but my company has the expertise and equipment to do this work. Would my

company ever be awarded a work package under the program?

A contractor with no prior experience would not be awarded a work package under Phase 1 of the program. However, as the program moves into future phases, it is expected that there will be a supplier development component introduced to help companies with the appropriate capacity pivot into the sector.

94. Do all service companies need to be "pre-approved" via SaskTenders? (Updated

November 9th, 2020)

No. As outlined in question 71, only those companies that are primarily responsible and accountable for delivering the overall work in one of the 14 major service types laid out in the RFSQ need to respond to the RFSQ. You will need to carefully review the RFSQ and then determine whether responding is the appropriate step for your business. The 14 major service types in Well Decommissioning and Remediation/Reclamation are: 1. Service Rig 2. Wellsite Supervisor 3. Engineering/Project Management 4. Coil Tubing 5. Wireline 6. Fluid Hauling and Disposal 7. Cut and Cap


8. Pressure Testing 9. Cementation and Service Maintenance 10. Downhole Tools 11. Initial Environmental Assessment (i.e. Phase 1) 12. Detailed Site Assessment 13. Environmental Contracting (i.e. Heavy equipment, transport and waste disposal) 14. Reclamation/Remediation Regulatory and Abandonment Process Applications. If your business supports these service areas rather than directly delivering them, you do not need to respond to the RFSQ. Providing subcontracting work in the ASCP does not require pre-qualification or response to the RFSQ. However, minor contractors are required to be Saskatchewan-based.

a. Does this include all small individually staffed companies such as hoe operators, lease

consultants, line locators, and seed suppliers to simply name a few?

No. These services do not need to go through the RFSQ process but should be

Saskatchewan-based.

b. Landowners often supply topsoil for reclamation purposes. Would they have to apply

to SaskTenders as a service company?

No.

95. Will these approved service companies have to apply to the SRC to bid on every project

in the system - including those proposed by larger licensees with large, existing area-

based programs?

No. Approved service companies who have successfully completed the second stage of the RFSQ will be included in work packages based on a licensee’s preferred vendor nominations, availability and pricing.

96. How were the contractors selected through the program?

The contractors have not been selected. Contractors will be required to apply through SaskTenders to become eligible https://sasktenders.ca/content/public/Search.aspx. (Comp #7710A). An ongoing series of town hall sessions has included contractors identified through inquiries, known contacts, and research by SBP. It was a genuine attempt by SBP to include as many Saskatchewan-based contractors as possible. Lack of participation in the town hall sessions does not mean that a contractor will not be able to apply to become eligible under the program. The program will determine eligibility based on program criteria – contractors will not be selected by government.

https://sasktenders.ca/content/public/Search.aspx.


97. Are the lists of nominated wells and facilities and the SRC’s work packages going to be

made public so that service companies can contact licensees?

Yes, nominated projects are posted on the ASCP website.

98. How will contractors be notified of the work occurring in their area, and will it be open

to all contractors under program or do licensees have ultimate control over the

awarding of work taking place on their sites?

The SRC will be responsible for communicating with contractors with respect to the funded work packages that are put out to the sector under this program. Area, or region, will be one consideration, but the program will recognize that companies are often willing and able to do work in multiple regions of the province. A particular work package may be awarded based on the licensee’s submitted list of preferred contractors, but this will not always be the case. The intention is to ensure an efficient, effective, and fair spend of the funding to ensure that a broad base of small and large service companies benefit.

99. Would eligible contractors have the opportunity to work with other eligible contractors

to become a one stop shop for the work, or does this all go through a single “lead”

contractor? (Updated November 9th, 2020)

One of the goals of the program is to be flexible and allow the sector to mobilize in an efficient way and do what it does best. It is likely that the program would accommodate, and potentially even encourage, this kind of relationship building provided that all major service companies are eligible under the program.

100. Does the pre-Qualified vendor process for projects under the orphan fund program

make me eligible for work under the ASCP?

No, the pre-Qualified vendor process for projects under the orphan fund program is for Orphan Well Fund projects only.

101. Can you please confirm for me - If a company/vendor is on the list located here:

https://simsa.ca/wp-content/uploads/ASCP-Prime-Contractor-List-for-SIMSA.xlsx , does

this mean they are already registered and can be “nominated” as a preferred contractor

or do they still need to register themselves on the SaskTenders website?

Being on this list does not mean they are prequalified. It just means they attended one of our initial Town Halls. It is solely for networking purposes.

Phase 2 Program Update (New – December 11th, 2020)

https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/accelerated-site-closure-program#apply

https://can01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fsimsa.ca%2Fwp-content%2Fuploads%2FASCP-Prime-Contractor-List-for-SIMSA.xlsx&data=02%7C01%7Cscott.weaver%40gov.sk.ca%7C7c7a041a888f4145589c08d812273ce6%7Ccf4e8a24641b40d2905e9a328b644fab%7C0%7C1%7C637279307019696796&sdata=f72g%2Fc5emqvyrF0FEJoJ7Lp68zgNUTk%2B2jy0eJHVidY%3D&reserved=0


102. How much funding is being allocated for Phase 2 of the ASCP?

Phase 2 of the program will see an additional allocation of $200M in funding to eligible licensees.

103. Will the program continue to cover 100% of the eligible costs for Phase 2 work?

Yes. The program will continue to fund 100% of the eligible costs as outlined in the work package. You must have a work package agreement in place with the SRC prior to commencing program eligible work.

104. How will the allocations be determined in Phase 2?

Phase 2 allocations will be determined using the same formula as Phase 1. That is, allocations will be based on the licensee’s share of inactive liability relative to the total inactive liability across the province.

105. What are the eligibility criteria for licensees for Phase 2 of the program?

Phase 2 of the ASCP will utilize the same eligibility criteria and test of good standing for licensees as Phase 1. Some adjustments related to timing of payments to get into good standing will be made in to account for measures taken by the province to provide relief for the impacts of COVID-19 on the sector.

106. Due to industry relief measures, invoices for levy payments were issued later than usual

for the 2020-21 fiscal year. How will this impact licensees’ eligibility?

Owing to a later than usual issuance of invoices related to the 2020-21 Orphan Fund and

the 2020-21 Administrative Levy, licensees will have until January 22, 2021 to pay any

outstanding amounts owing in relation to those levies. Should a licensee still owe

amounts on either of these two levies after January 22, 2021, their ASCP allocation will be

suspended pending full payment of any amounts owing.

107. When and how will licensees be notified of their allocations?

Licensees can expect to receive their Phase 2 allocations the week of December 14th, 2020. Licensees will be notified via IRIS in the same way that they were notified of Phase 1 allocations.

108. When and how can licensees start nominating infrastructure for Phase 2 of the ASCP?

Phase 2 nominations will utilize the same IRIS process as Phase 1. Licensees can begin nominating infrastructure for Phase 2 at any time. There is no need to identify that nominations are for Phase 2 of the program.


109. Are there any changes to eligible activities and eligible expenditures for Phase 2?

No. Phase 2 will utilize the same program parameters as Phase 1 with respect to eligible activities and eligible expenditures.

110. Will the list of eligible service companies carry over into Phase 2?

Yes. The list of eligible service companies will run through the life of the program, with regular adjustments as service companies come into the program and as service companies exit the program.

111. I understand that eligible service companies have been asked to submit updated pricing

for the program. When will that new pricing take effect?

Service companies have been asked to submit updated pricing for Phase 2 of the program. That process is expected to be completed in January 2021 and the new pricing will be applied on a go forward basis with respect to the signing of ASCP work package contracts.

Landowner – Site Nomination Process Questions

(New – January 15th, 2021)

112. Why is there a landowner nomination process for the ASCP?

Landowners may nominate specific oil and gas sites on their property for consideration for work under the ASCP. The process has been put in place to allow landowners to identify sites for program consideration.

113. Why would a landowner want to nominate a site into this program?

There are various reasons why a landowner might want to nominate a site into the ASCP. In some cases, it may be that a well is inactive and the landowner would like to see the site abandoned and reclaimed. The program will not attempt to evaluate the reasons behind a site nomination and will not adjudicate disputes between a licensee and a landowner. As in the normal course of business, this is considered a private matter between the licensee and the landowner.

114. Is the landowner nomination process open to any landowner in Saskatchewan with an

oil and gas site on their property?

Yes. The landowner nomination process is open to all landowners. However, at this time only landowner-nominated sites with ASCP eligible licensees will be considered under the program. A list of licensees that are eligible for the program can be found on the ASCP website.

https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/accelerated-site-closure-program#eligibility

https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/accelerated-site-closure-program#eligibility


115. Does the landowner nomination process apply to orphaned sites?

Yes. However, these nominated sites will not be completed under the ASCP. Rather, the Saskatchewan Oil and Gas Orphan Fund (SOGOF) will use this information to assist in prioritizing work to be completed. Note that the SOGOF primarily uses environmental and public safety criteria to prioritize work.

116. What happens to a site when it is nominated by a landowner? Does that mean that it

will be abandoned and/or reclaimed under the program?

The relevant licensee will be notified that one or more of their sites have been nominated by a landowner for consideration under the ASCP. The list of nominated sites will also be posted on the program website. Nominating a site does not guarantee that it will be abandoned and/or reclaimed under the program. Ultimately, the licensee is the owner of the asset and must make that decision.

117. If the licensee decides that they want to abandon and/or reclaim a landowner

nominated site under the ASCP, how does that work get done?

If the licensee wants to work on a landowner nominated site, the licensee will identify that site to the program, just as they would with any other site. The Saskatchewan Research Council (SRC) will then create work packages, together with the licensee, that will contain that landowner nominated site. The SRC and the licensee will work together to identify the contractors that will perform the work. The SRC and the licensee will enter into a contract to complete the work packages and contractors will be paid by the program. There will be no changes to the regulatory standards or processes that must be adhered to.

118. Where does a landowner go to nominate a site for abandonment and/or reclamation?

To nominate a site for abandonment and/or reclamation, please go to the Accelerated Site Closure Program webpage: https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/accelerated-site-closure-program

119. Where can I find help to fill out the landowner site nomination form?

An Instruction tab has been added to the excel form to help landowners fill out and submit the form electronically.

120. How can a landowner find the licence number of the well, facility or flowline being

nominated?

Signage at the lease site should provide the well or facility license number. Most flowlines do not currently have a license number associated with them. In these cases, the well license number that the flowline is associated with should be used. If a landowner does

https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/accelerated-site-closure-program

https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/accelerated-site-closure-program


not know the licence number of the well, facility or flowline being nominated, the simplest way to obtain that information is to contact the licensee responsible for the site.

121. Can landowners nominate the same site twice?

No. The number of times a site is nominated does not impact whether it is given more or less consideration under the ASCP. It is the licensee who will make the final decision on whether work will be completed on the nominated site.

122. What will happen with the information contained in the landowner nomination form?

The Government of Saskatchewan will use this information for the purposes of the landowner site nomination process. It will be used to notify licensees of the sites that have been nominated and to create a list of nominated sites that will be posted on the program website and assess the performance and outcomes of the Landowner Site Nomination. Note – no personal information will be shared publicly. Only the well/facility/flowline license number will be shared, along with the name of the licensee.

123. How do I know if a site that I nominated will be completed under the program?

In the event that the licensee chooses to conduct work on a landowner nominated site under the ASCP, you will be contacted by the licensee, just as is the case in the normal course of business.

Indigenous Participation

(New – January 21th, 2021)

Indigenous service companies

124. Where do I find information on the general program requirements for major

contractors?

All general information relevant for major contractors is available in the Questions and Answers document under section Service Company - General Questions (Questions 68-101). Indigenous major contractors must meet general program requirements in order to be eligible.

125. How will the program define an Indigenous major contractor and/or minor contractor?

Major contractors and minor contractors must meet one of the following criteria in order to be considered an Indigenous business under the ASCP. The First Nations Natural Resource Centre of Excellence (COE) will review applicants for qualification as Indigenous under the program. In all cases, Indigenous major contractors must meet the general


program requirements for major contractors. The criteria to be considered an Indigenous business under the ASCP are as follows:

1. At least 51 per cent of the company is Indigenous-equity-owned (sole proprietor,

community owned, or shareholders) and is Indigenous-controlled (where

applicable, controlling shares are held by Indigenous equity owners);

2. In the case of a joint-venture (JV) or other partnership structure, control must be

held by the Indigenous partner in accordance with the above definition (i.e. that

Indigenous partner must be at least 51 per cent Indigenous owned and controlled);

3. At least 51 per cent of the company’s board of directors or executive officers are

Indigenous;

4. At least 51 per cent of the employees in the company are Indigenous.

If the applicant is a non-Indigenous major contractor, they must meet the following criteria to be considered an Indigenous applicant:

5. All (100 per cent) of the sub-contractors working on a site, a number of sites, or all

of the sites an SRC issued Work Package are Indigenous, as described above.

These criteria were developed in partnership with the program’s First Nations and Métis Working Group.

126. Do Indigenous minor contractors need to pre-qualify for the program?

No. Like all minor contractors in the program, there is no need to formally pre-qualify. The

use of minor contractors is at the discretion of the licensees and major contractors.

However, the First Nations Natural Resource Centre of Excellence (COE) will be using the

EXPORT database to compile an inventory of SK-based minor contractors that qualify as

Indigenous as per the program definition above. Minor contractors used from the COE’s

inventory will allow licensees to earn credits from the Indigenous Business Credit Pool.

Other qualifying Indigenous minor contractors may be identified at the time of work

package development or at the time of program invoicing. These situations will be looked

at by the program on a case-by-case basis and added to the EXPORT database inventory

as necessary.

127. Do Indigenous major contractors need to pre-qualify for the program?

Yes, all Indigenous major contractors will need to meet the general program requirements for major contractors. All existing pre-qualified major contractors that want to qualify as Indigenous under the ASCP will be asked to register in the COE’s EXPORT database. As part of registering in EXPORT, major contractors will be required to complete a declaration attesting to meeting the program definition of an Indigenous business. The COE will develop a list of qualified Indigenous major contractors, which will be updated


and shared regularly with licensees.

128. What is the EXPORT database?

EXPORT will be the tool used to identify, and create an inventory of, qualifying Indigenous

major and minor contractors eligible for Credit Pool allocation. This tool can be used by

licensees and contractors to find qualifying Indigenous major contractors and minor

contractors. A link to the EXPORT database can be found here: www.exportdata.ca. If you

have any additional EXPORT specific questions, please contact FNCEO at

[email protected].

129. How can I find out more information on the EXPORT database?

If needed, information sessions regarding EXPORT, how to register, and how to use the tool will be provided. Outreach efforts will be made in the coming weeks. However, licensees, contractors, and minor contractors are encouraged to access this user-friendly tool as soon as they are ready. The COE will be available to assist in registering in and navigating EXPORT. A link to the EXPORT database can be found here: www.exportdata.ca. If you have any additional EXPORT specific questions, please contact FNCEO at [email protected].

130. Where one partner in a Joint Venture (JV) or partnership has already pre-qualified for

the program, does the JV or partnership need to reapply, get a new BA code, and submit

detailed pricing information?

Yes, the Joint Venture or partnership would be considered a new entity and would need to re-apply through SBP’s RFSQ process. In the interest of expediency, these applications will be fast-tracked through the program approval process. If you are an Indigenous Joint Venture or a partnership and need to re-apply, please notify SBP at [email protected].

131. What kinds of JVs/partnerships are acceptable and what kinds are not acceptable?

A JV must meet the following criteria to be considered an Indigenous business under the ASCP:

Both partners must be SK-based;

The Indigenous partner must be at least 51 per cent Indigenous owned and

controlled and hold control in the JV;

One of the two companies must have existing experience in the service domain

applied for; and

Must meet any reporting requirements that may be established by the program.

132. How does a major contractor or minor contractor confirm that it will be considered an

Indigenous business under the program?

https://can01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fwww.exportdata.ca%2F&data=04%7C01%7Csofiia.zdolyny%40gov.sk.ca%7Cde0a430c83a149ae610c08d8bcbbe672%7Ccf4e8a24641b40d2905e9a328b644fab%7C0%7C0%7C637466862494155250%7CUnknown%7CTWFpbGZsb3d8eyJWIjoiMC4wLjAwMDAiLCJQIjoiV2luMzIiLCJBTiI6Ik1haWwiLCJXVCI6Mn0%3D%7C1000&sdata=rXZ1k6AuqgveIH2mPiexyWGDH5kdbhOQmrresrMQkrM%3D&reserved=0






The COE will manage an inventory of qualifying Indigenous major contractors and minor

contractors using the EXPORT database. Major contractors and minor contractors seeking

to qualify as Indigenous under the program will register in the EXPORT database. As part

of the registration process, the contractor will complete a declaration attesting to

meeting the program definition of an Indigenous business. The COE will work with

contractors to ensure that they meet program requirements and can provide feedback on

questions and concerns. Confirmation of qualifying as an Indigenous business under the

program will be provided. Once registered, EXPORT will house a real time inventory of

qualified Indigenous major contractors and minor contractors for licensee use under the

Credit Pool.

133. Where can licensees and major contractors find an inventory of qualifying Indigenous

major contractors and minor contractors?

An inventory of qualifying Indigenous major contractors and minor contractors will be managed by the COE and can be found in the COE’s EXPORT database. Licensees, major contractors, and minor contractors are encouraged to utilize the EXPORT database to identify and contact qualifying Indigenous major contractors and minor contractors for use under the ASCP. A list of qualifying Indigenous major contractors and minor contractors will also be provided directly to eligible licensees on a regular basis, similar to the existing program process. Note, this list is subject to change throughout the life of the program and will be updated at regular intervals. An initial list will be made available as soon as possible. Please check the EXPORT database regularly. Licensees who are ready to advance projects that include Indigenous major contractors and minor contractors are encouraged to do so. Provided that the major contractors are eligible for the general program, major contractors and minor contractors can be qualified as Indigenous after the work package is approved, after the work has started, or after the work has been completed. Work packages issued after January 1, 2021 will qualify. However, due diligence will be the responsibility of the licensee.

134. What if my service company meets the program definition of an Indigenous business,

but I am not on the list of Indigenous major contractors or minor contractors?

If you would like to qualify as an Indigenous major contractor or minor contractor, please

register in the FNCOE’s EXPORT database. A link is available here: www.exportdata.ca. If

you have any additional EXPORT specific questions, please contact CEO at

[email protected].




Indigenous Business Credit Pool

135. How much additional funding is available through the Indigenous Business Credit Pool

(Credit Pool)?

The Credit Pool will provide access to an additional $15M in program funding for eligible licensees that choose to utilize qualifying Indigenous major contractors and minor contractors.

136. How does the Credit Pool work?

Licensees that utilize qualifying Indigenous major contractors and minor contractors to complete program work will receive a program credit for future use. For each program dollar spent on qualifying Indigenous businesses, licensees will receive a fifty-cent credit for future use. This credit will come from Credit Pool funds and will be unencumbered - the credit can be used to fund 100% of the costs of future program work at the licensee’s discretion.

137. When does the Credit Pool program start?

The Credit Pool is applicable to any work packages under the ASCP that are executed after January 1, 2021.

138. How will the Credit Pool be allocated to licensees?

The Credit Pool will be offered in two tiers. Licensees with at least $650,000 in Phase 2 allocation will be allocated access to the Credit Pool. The allocation will be made on the basis of licensee’s share of inactive liability, similar to the general program allocations in Phase 1 and Phase 2. Licensees with less than $650,000 in Phase 2 allocation will be able to access the Credit Pool by application to the SRC.

139. How much of the $15M in Credit Pool funds will be allocated and how much will be

available to licensees by application?

About $13.5M in Credit Pool funds will be allocated proportionally to licensees with at least $650,000 in Phase 2 allocation. The remaining $1.5M in Credit Pool funds will be available by application to licensees that do not meet the minimum allocation threshold.

140. Why is the Credit Pool using this two-pronged approach?

The two-pronged approach provides access to the Credit Pool to all licensees – both large and small. Proportional allocations to licensees are consistent with the overall program approach and will allow for planning by licensees and capacity building for Indigenous businesses. Providing access by application ensures that smaller licensees are able to take advantage of the Credit Pool (on an allocation basis, they would gain access to less than $25,000 in additional program funds, insufficient to complete an additional small project),


providing a broader range of licensees for qualifying Indigenous major contractors and minor contractors to work with.

Licensees Receiving an Allocation

141. How and when will licensees who qualify for an allocation under the Credit Pool know

how much they are eligible for?

Credit Pool allocations for eligible licensees will be issued via email during the week of January 18th 2021 and will be posted on the ASCP website.

142. What happens if the licensee is not interested in utilizing their Credit Pool allocation?

If a licensee is not interested in utilizing their Credit Pool allocation, they should promptly notify the SRC. That licensee’s Credit Pool funding will be reallocated.

143. How do licensees access their allocation under the Credit Pool?

In order to receive access to their allocated Credit Pool funding, the licensees will utilize qualifying Indigenous major contractors and minor contractors in the conduct of program work under a program issued work package. This work package will be developed and carried out in the same way that any other work package is developed and carried out, except for that:

1. Interested licensees can and should nominate Indigenous major contractors as preferred vendors.

2. As a part of the existing reporting process on work package progress and completion, the licensee will indicate the amount spent on qualifying Indigenous major contractors and minor contractors. SRC will review the invoices with assistance from the COE to confirm.

3. For any Indigenous minor contractors that were not already identified by the program, the SRC and COE will review for qualification via the program definition.

4. The SRC will apply a credit of $0.50 per $1 that has been spent on qualifying Indigenous major contractors and minor contractors.

144. How will the program confirm and track credits earned by licensee’s relative to their

allocation?

Credits will be confirmed at the time of invoicing. The licensee will be notified about credits earned as invoices are processed. Licensees will receive regular updates on the additional funding earned via the Credit Pool.

145. For licensees receiving an allocation, is there a minimum spend required on Indigenous

service companies on a particular work package?

No. Licensees that receive an allocation can earn credits on an ongoing basis as work is


completed.

146. Is there a time limit upon which licensees receiving a Credit Pool allocation must utilize

that allocation?

Yes. Licensees receiving an allocation must fully utilize their allocation by February 28th, 2022. This means that invoices for completed work have been submitted to the SRC.

Licensees who are not able to fully utilize their allocation by February 28th, 2022 will have their remaining funding re-allocated to licensees that have been able to fully utilize their allocation.

Any unutilized Credit Pool funds – where the invoices have been submitted to the SRC - will return to the general program funding pool by October 31st, 2022.

147. When can licensees receiving an allocation start to utilize the credits earned?

Licensees can access the credits as soon as they are earned. It is up to the licensee to determine how they plan to utilize credits earned.

Licensees Applying for the Credit Pool

148. How can the licensees that do not qualify for a proportional allocation apply for access

to Credit Pool funding?

Licensees that do not qualify for an allocation will be able to apply to the SRC for access to the remaining $1.5M in Credit Pool funding. Access to Credit Pool funding by application is based on the ability of the licensee to incorporate qualifying Indigenous major contractors and minor contractors into their work packages.

An application form will be developed, posted on the ASCP website, and shared with licensees. Licensees wishing to participate will be required to submit an application within a time limited application window. More information on the application process, timing, and the content of the application will be made available as soon as possible.

If a licensee’s application is approved, the licensee will be conditionally granted access to the associated credit based on their proposed spend on qualifying Indigenous major contractors and minor contractors.

Like the program currently operates, the SRC will execute a work package contract with the licensee. The credits will be earned, and the conditional grant executed, at the time of confirmation of invoices for the associated work package.

149. Is there a minimum threshold spend on qualifying Indigenous businesses associated

with a work package in the application portion of the Credit Pool?

Licensees accessing the application portion of the Credit Pool will be required to spend a minimum of $50,000 on Indigenous service companies within a given work package. This


ensures that the licensee can earn credits sufficient to complete an additional small project under the program (i.e. $25,000).

Alternatively, if the licensee is proposing multiple work packages, the combined spend must be $50,000 across the work packages. Note that these are guidelines and, like the program more broadly, the intent is to provide flexibility to account for a range of acceptable approaches by licensees.

150. What is a maximum amount of funding credits that licensees can earn under the

application portion of the Credit Pool?

The maximum amount of credits that a licensee can earn under the application portion of the Credit Pool is $100,000, which requires a $200,000 spend on Indigenous businesses.

151. At what point will credits earned on a particular work package be confirmed by the

program for licensees?

Credits will be confirmed at the time of invoicing. The licensee will be notified about credits earned as quickly as possible.

152. What happens if, during the application period, the SRC does not receive sufficient

proposals to utilize the $1.5M in additional funding?

If the SRC does not receive sufficient take-up from licensees during the application period, any remaining funding will be redistributed to the allocation portion of the Credit Pool. This is to ensure that the program provides an opportunity to fully leverage the spend on qualifying Indigenous major contractors and minor contractors.

153. If licensees are unable to follow-through on the proposal contained in their application,

and funding credits are not earned, what happens to the remaining funding?

All remaining funds that are not utilized by October 31st, 2022 will be reallocated to the general program funding pool.

154. How and when are the credits earned to be used by licensees?

The credits earned will be unencumbered - the credit can be used to fund 100% of the costs of future program work and is at the discretion of the licensee. Licensees can start to access the credits as soon as they are earned.

First Nations Stewardship Fund 155. How much funding is available under the First Nations Stewardship Fund (Stewardship

Fund)?

The Stewardship Fund will guarantee $15M for program work conducted on-Reserve in First Nations communities across Saskatchewan. If there is sufficient take up from


licensees, the program will allocate an additional $5M for program work conducted on-Reserve.

156. How will Stewardship Funds be allocated?

Stewardship Funds will be allocated proportionally to First Nations based on each community’s share of the total on-Reserve inactive liability in Saskatchewan.

157. What is the role of the licensee in the Stewardship Fund?

Licensees will nominate oil and gas sites located on-Reserve that they would like to be addressed under the Stewardship Fund. While the process to develop and execute work packages will be the same as in the broader program, licensees will be required to engage with, and seek input from, communities regarding abandonment and reclamation activities on their lands. The work package that is assembled will be the result of the licensee nominations and conversations with the community.

158. What are the expectations on licensees for community engagement?

There are no specific expectations set out by the program. However, the First Nations Natural Resource Centre of Excellence (COE) will facilitate licensee engagement with communities and contractors to ensure that the resulting work package(s) is acceptable to all participants. The program has also established a First Nations and Metis Working Group (FNMWG) to facilitate ongoing program engagement. The program will monitor the quality of community engagement and willingness to accept community input through the COE and the FNMWG. Ultimately, the program will ensure that any work packages developed and executed under the Stewardship Fund are acceptable to the relevant community.

159. How does a licensee nominate inactive oil and gas sites for consideration under the

Stewardship Fund?

Licensees can nominate oil and gas sites located on-reserve through the existing nomination process using the nomination form located on the ASCP website. In the template, licensees should use the “Additional considerations” column to indicate that the nomination is under First Nations Stewardship Fund, and indicate which community the site is located in. The nomination form is available on the program website.

160. When should licensees nominate sites for the Stewardship Fund?

Licensees should have their sites nominated no later than February 12th, 2021. 161. I have nominated sites located on-reserve prior to the announcement. Do I have to

nominate them again?

No. If you already nominated the sites located on-Reserve, do not nominate them again.


The program will pull these nominations into the licensee’s on-Reserve nominations. 162. What do I do if I want to include other information under “Additional considerations”

column?

If there are other notes you would like to make under “Additional considerations”, indicate that the nomination is under First Nations Stewardship Fund first, indicate the Reserve that the nomination is located in, and other information afterwards.

163. What is the role of the First Nations Communities in the Stewardship Fund?

First Nations Communities will be involved in the process of assembling work packages located on their lands. The intent of the program is to ensure that communities provide significant input into the development of work packages on their lands. The COE will work with communities and licensees to support community input.

164. I am a licensee operating on-Reserve. However, I do not want to abandon all of my

inactive wells because they may still be economic in an improved pricing environment.

Am I being forced to abandon these assets?

No. Like the rest of the program, licensees will not be forced to abandon/reclaim particular sites.

165. Can funding be directed to sites that are adjacent to the community?

While funding is dedicated to sites located within a community, this may be considered under the program, particularly where there are adjacent sites that are of significance to the community. The COE will work closely with licensees and communities to highlight these significant sites and ensure that they are considered for inclusion in a work package.

166. How will the program determine whether or not there is sufficient take-up to justify

releasing an additional $5M in funding for the Stewardship Fund?

The decision will be made based on the overall number and type of sites that are nominated by licensees. Licensees will be asked to nominate all sites on-Reserve in Saskatchewan that, regardless of funding availability, they would like to see addressed under the program. If there is sufficient licensee take-up, an additional $5M will be allocated to the Stewardship Fund. This decision is intended to be made as quickly as possible to give communities and licensees time to plan.

167. What if I do not know which of my sites are located on-Reserve in SK?

If you do not know which sites are located on-reserve in SK, please contact the ER Service Desk at 1-855-219-9373 or [email protected] for follow-up.

168. Where can I find information on the funding allocations to communities?


The community allocations will be available on the program website as soon as possible. 169. How are the allocations by community allocated to licensees where there are multiple

licensees operating in a community?

The intent is that licensees will receive access to funding that is proportional to their share of inactive liability in a particular community. The program will monitor this to ensure a degree of fairness. However, this will not be a hard and fast rule – the work package that gets developed will be the result of conversations between the licensees and the community.

170. Is there a minimal allocation to each licensee operating on the reserve?

Where a licensee has only one or a few sites located on-Reserve, that licensee will be able to access funding to address at least one site. Note that like the program more broadly, the intent is to provide flexibility to account for a range of acceptable options for licensees and communities.

171. If the allocation is not being accessed, what happens to that funding?

Any unsubscribed Stewardship Funds will return to the general program funding pool on October 31st, 2022. While this is not anticipated, this will ensure that overall program funding can be fully utilized before it must be returned to the federal government as per the federal funding agreement.

172. What is the role of the Indian Oil and Gas Canada (IOGC) in the process?

While the program provides funding for the work, all regulatory requirements in place remain the same.

173. Is the Indigenous Business Credit Pool applicable to the work on-reserve and completed

under the Stewardship Fund?

Yes, the Indigenous Business Credit Pool is applicable to work completed under the Stewardship Fund.

Questions?

If you have any questions or concerns contact the ER Service Desk at 1-855-219-9373 or [email protected], or visit www.saskatchewan.ca/Business/Agriculture-Natural-Resources-and-Industry/Oil-and-Gas/Accelerated-Site-Closure-Program.


http://www.saskatchewan.ca/Business/Agriculture-Natural-Resources-and-Industry/Oil-and-Gas/Accelerated-Site-Closure-Program

http://www.saskatchewan.ca/Business/Agriculture-Natural-Resources-and-Industry/Oil-and-Gas/Accelerated-Site-Closure-Program

Accelerated Site Closure Program (ASCP) Questions and Answers

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