British Columbia issues “heavy” challenge to neighbors

Gary Park

Cash-strapped British Columbia has slashed by 66 percent all heavy oil royalties, lowering payments to about 10 percent of the sale price from 25 percent for crude with a density of about 27 degrees. Energy Minister Dan Miller said further initiatives will be announced to make the province’s oil and gas industry more competitive with Alberta and Saskatchewan.

The heavy oil cuts will applying to remaining established reserves of about 5.7 million barrels, discovered resources of 12.6 million barrels and potential undiscovered recoverable resources of 100 million barrels. Less than 1 percent of the reserves have been produced.

Simultaneously, Canadian Occidental said it will invest C$100 million over the next seven years to explore and develop its 135 million barrel Hay heavy oil field in northeastern British Columbia, targeting 6,000 barrels a day of production by April 2000.