Canada’s sixth largest province, Alberta, has introduced two new incentive programs, directed at oil and gas companies, that aim to promote investing in new exploration and enhanced recovery of existing wells, reported CBC News. Under the Enhanced Hydrocarbon Recovery Program and the Emerging Resources Program companies would be paying reduced royalty rates on those projects for a longer period, according to Maclean’s.
Reuters quoted President of the Canadian Association of Petroleum Producers, Tim McMilan, saying that “these programs serve to recognize the higher risks and greater project costs of drilling in emerging resource plays and implementing secondary recovery schemes.”
The two programs are part of the New Democratic Party (NDP) government’s recently revised Modernized Royalty Framework. The changes were recommended by the provincial royalty review advisory panel in January 2016 and they are set to take effect at the beginning of 2017.