Page 1

R.FRench TRAnSPORT

Southeast Saskatchewan Oil Industry update

April 2017

Weyburn • Estevan • Carlyle • Assiniboia

CHANGES IN THE INDUSTRY Inside this edition: Clean Fresh Water

Oil & Salt Water

• OPINION: A co-operative spirit is needed • Crescent Point to drill 350 wells in region • Province increases industry oversight

Transfers

Tankers Licensed Fresh Water Well

Delivered Fresh Water: Cold or Heated

Service Work

Insulated & Lined Frac Tanks 110m3

SGI Safety Station

Serving SE Saskatchewan and SW Manitoba

o o — Greg Nikke

Offic D spatch

(306 455-3774 The Safety Association for Candada’s Upstream Oil and Gas Industry

R. French Transport Ltd.

has developed, implemented and audited a

Arcola and Forget SK

Health & Safety Management System

www.frenchtransport.ca

904 East Avenue • Weyburn, SK Phone: (306) 842-7487 Fax: (306) 842-0282 E-mail: production@weyburnreview.com Internet: www.weyburnreview.com


PAGE 2 April 2017 « BLACK GOLD

Crescent Point Energy plans to drill 350 new wells in Williston Basin Crescent Point Energy plans to drill around 670 net wells this year and to generate about 172,000 barrels of oil per day equivalent, with a projected rate of 183,000 barrels by the end of 2017. Of the 670 net wells to be drilled in 2017, about 350 of those will be drilled in the Williston Basin, which should result in exit production growth of around five per cent, and funds flow from operations in excess of capital expenditures of $500 million based on current strip prices. In the first quarter, the company was outperforming its guidance of 170,000 boe/d as of the end of February, and indicated that after spring breakup, the company will revise its production guidance for this year. Crescent Point plans to spend $1.45 billion in 2017 in capital expenditures. “We forecast exit to exit production growth of approximately 10 per cent per share in 2017. We remain focused on delivering per share growth for our shareholders and are currently ahead of our first quarter estimates,” said Scott Saxberg, president and CEO of Crescent Point. He noted the company had an excellent fourth quarter to end 2016, as production exceeded their guidance for 2016, with development capital spending on budget. The company added over 1,000 new internally-identified net locations that more than replaced its annual drilling program. In the fourth quarter of 2016, Crescent Point drilled 136 wells, or 121.9 net, in the

Williston Basin, with a focus on low-risk high-return infill development in Viewfield Bakken, step-out drilling in Flat Lake and down-spacing programs in North Dakota. The company improved operating efficiencies in each of their resource plays in the Williston Basin, such as improving drilling days by 11 per cent compared to 2015. Crescent Point also identified over 700 net new drilling locations in the Williston Basin during 2016, including 300 net locations acquired in the third quarter of 2016 as part of the company’s Flat Lake acquisition. By the end of 2016, Crescent Point achieved production of 165,097 barrels a day equivalent in the fourth quarter, with an exit production of 167,764 boe/d exceeding the guidance for the year. The company’s waterflood programs improved recoveries while reducing decline rates. Waterflood reserves were increased for the fourth consecutive year, by adding about 10.5 MMboe/d of 2P reserves during 2016. Of the waterflood additions, about 95 per cent are from Crescent Point’s Viewfield Bakken and Shaunavon resource plays. In late 2016, the company continued to test its new injection control device (ICD) system. The success of the initial pilot program led Crescent Point to implement additional ICD systems throughout the Williston Basin late in the fourth quarter of 2016, with additional systems to be installed by the second quarter of 2017.

East-Wey Auto Body 79-17th Street, Weyburn

(306) 842-7324

Add more life to your Vehicle!

CARDLOCK 24/7 SERVICE

Multiple Lanes • Lounge • Laundry • Showers

CO-OP CROSSROADS CONVENIENCE CENTRE

PRAIRIE SKY CO-OP

Corner of Highways 13 & 39, Weyburn • 306-848-3689 www.prairieskycoop-com

Drilling rig punching a new hole

Review Photo 3114 — Greg Nikkel

Rig No. 1 for D2 Drilling Inc. is set up and ready to go on a well site located south of Weyburn just west of Highway 35. With oil prices in the neighbourhood of $50 a barrel, some drilling activity has returned in the southeast area.


BLACK GOLD » April 2017 PAGE 3

Details released in 2017-18 provincial budget

Province increases oversight of oil industry The 2017-18 provincial budget will see a significant enhancement to the regulatory oversight of the oil and gas industry. The Petroleum and Natural Gas Division of the Ministry of Economy, which is the provincial regulator of oil and gas activities, will receive an additional $1.4 million and 13 full-time equivalent (FTE) positions in the 2017-18 budget. The additional funding will be allocated to the following initiatives: • $600,000 start-up funding for a multi-year Pipeline Regulation Enhancement Program (PREP) to strengthen Saskatchewan’s approach to pipeline regulation; • $500,000 increase in core funding to increase the number of field inspectors in the ministry’s field offices in Estevan, Swift Current, Kindersley and Lloydminster; and • $250,000 funding to expand the technical capacity of the ministry to support the Government of Saskatchewan’s climate change commitments related to the upstream oil and gas industry. The budget also includes $460,000 in capital spending to begin the expansion of the Integrated Resource Information System (IRIS) to support the implementation of PREP. IRIS is a custom built online business system that supports the development and regulation of Saskatchewan’s oil and gas industry. This funding will allow for web-based pipeline licensing, including flowlines, as well as additional reporting and mapping capabilities related to pipeline regulation. In addition to these recent developments, in 2016 the Government of Saskatchewan introduced Bill 43 – The Pipelines Amendment Act, 2016. This bill, slated for royal assent later this spring, will provide the legal foundation allow for the implementation of PREP and the enhancements to IRIS needed to support efficient industry regulation. Ninety per cent of the new operational funding announced today will be offset by an administrative levy assessed against the well and pipeline licence holders. To accommodate expanded pipeline regulation, the existing well levy formula under The Oil and Gas Conservation Act will be amended to include a levy for pipeline licensees. “The changes announced today, including the amendment to the administrative levy will enable the Government of Saskatchewan to deliver on significant improvements to its oil and gas regulatory programs,” Energy and Resources Minister Dustin Duncan said. “Public confidence in our regulatory system is vital to the long term growth and development of our oil and gas industry.” Consultation with the oil, gas and potash industries on the regulations needed to implement the changes to the administrative levy will occur over the next few months for implementation this year. In addition to the pipelines being covered under the administrative levy, other planned changes include: • Introduction of a base levy for all licenced wells, with the exception of abandoned wells, to ensure all well owners are paying an equitable share of the cost of regulating active and inactive wells; and • Elimination of the fees for seismic licences and explosive permits since these costs will now be fully offset by the proposed changes to the levy. The initiatives included in the 2017-18 Budget will continue the trend of strengthening oil and gas regulation in Saskatchewan. In recent years, the Ministry of Economy has implemented the following initiatives: • Created IRIS, which is a custom-built web-based business system that supports the development and regulation of Saskatchewan’s oil and gas industry and enables the industry to complete regularly performed business and regulatory tasks online; • Developed and implemented an administrative levy to recover 90 per cent of regulatory costs from industry including the cost of expanded regulatory programs; • Increased the number of FTEs assigned to oil and gas regulation;

Pipe Hustlers Water Hauling Fresh Water and Potable Water

• Established a single window with the Ministry of Environment and Ministry of Agriculture using IRIS to streamline the regulatory oversight of the industry; • Created a division within the Ministry of the Economy fully dedicated to oil and gas regulation to operate at arm’s length from oil and gas investment attraction activities; • Enhanced air quality monitoring; and • Enhanced pipeline monitoring.

17th Biennial

June 7 & 8, 2017

Exhibition Grounds • Weyburn, SK

Weyburn Review Photo Greg Nikkel

Show Highlights

• Awards ceremony • 24-hour security • Keynote speakers • Golf tournament and barbecue • Excellent show facilities with improved outdoor space and storage • First class show management • Social events to broaden exposure • Complimentary loading and unloading • Latest products and services on display • Free admission for attendees

Schedule of Events

Tuesday, June 6th Exhibitor Setup All Day GOLF TOURNAMENT Exhibitors & Platinum Sponsors 6 30 AM Morning Golf Registration & Breakfast 7:30 AM Morning Flight Shot Gun Start 12 00 PM Afternoon Golf Registration & Luncheon 1:00 PM Afternoon Flight Shot Gun Start ** Courtesy Rides for Golfers 2017 MEET & GREET KICK OFF DINNER 7 00 PM Steak or Lobster Dinner 11 00 PM Grounds Closed Wednesday, June 7th SHOW OPEN 10 00 AM 7 00 PM SaSKaTChEwaN OIl & GaS RECOGNITION awaRDS 12 00 PM Luncheon 12 30 PM Guest Speaker 1 00 PM 2017 Saskatchewan Oil & Gas Recognition Awards Oilman of the Year & Hall of Fame nductees Presented by the Board of Governors SE SaSKaTChEwaN OIlMaN OF ThE YEaR awaRDS 7 00 PM Prime Rib Dinner 8 00 pm Opening Ceremonies 8 30 pm SE Saskatchewan Oilman of the Year & SE Saskatchewan Legends Awards Presented by Weyburn Oilshow Board 11 00 PM Grounds Closed Thursday, June 8th SHOW OPEN 8 00 AM 3 30 PM 7 30 AM 9 30 AM Barnstorming Breakfast Sponsored by PSAC (Tickets available from PSAC members) 12 00 PM ndustry Luncheon 12 30 PM Industry Guest Speaker

Sponsored by…

Weyburn Oil ShOW bOard

P.O. Box 1450, Weyburn, SK S4H 3J9 Tel: (306) 842.3232 Fax: (306) 842.3265 Email sk.oilshow@sasktel.net Web Site: www.oilshow.ca

Water hauling services include: •Drilling Rigs •Oilfield •Dust Control •Fire supression •Construction …and more •Farm Use

Anyone wanting to attend the Oil Show can register online at www.OilShOw.cA

Call Jay for details 306-861-7417

PLATINUM SPONSORS Trusted energy intelligence.

GOLD SPONSORS

SILVER SPONSORS

BRONZE SPONSORS

ReFined

Weyburn & Area


PAGE 4 April 2017 « BLACK GOLD

» Editorial

Can we smooth out booms and busts?

Volume 2 Issue 2

By Lynda Harrison, Daily Oil Bulletin Steven Berg isn’t sure he can trust himself to politely discuss how to remedy the pernicious cycle of booms and busts that have plagued Canada’s oil and gas industry for generations. “I don’t know if I can say anything without a bunch of swears coming out of my mouth,” the vice-president of operations of the Canadian Association of Oilfield Drillers Contractors (CAODC) told the Daily Oil Bulletin. During the booms, producers make windfall profits and go on spending sprees; operating costs rise and get out of control, then when the oil price inevitably drops, producers squeeze the service providers on costs, the service companies lay people off en masse, companies go bankrupt, then oil prices rise again and the cycle repeats. While some people say there are steps both producers and service companies can take to smooth out the cycles, there is a general consensus that they are an unavoidable part of a commoditybased business that is at the mercy of global prices. Berg suggests that tinkering with lease regulations, taxation, permitting and especially royalty structures would encourage drilling when oil is at $40 or $30 per bbl “as opposed to waiting until we hit $55 [oil] before the rigs start working again.” WTI oil prices have recovered from lows in the $20s per bbl last February, to over $50 (although they sit just below that now), the service sector is hiring again, but some companies report that’s been a challenge too. Many of the skilled workers that were laid off have returned to their homes in Eastern Canada and they are reluctant to head west again until they know they have enough work to make it worth their while. “They took with them industry knowledge and experience and we lost tens of thousands of people with [that] knowledge and we can’t replace them,” says Berg. According to the Government of Canada, in Alberta alone, the industry has seen direct job cuts of nearly 30,000 since the fourth quarter of 2014; meanwhile a report by EY and the University of Calgary says 80 per cent of companies surveyed have reduced headcount over the last two years. Fernando Aguilar, Calfrac Well Services Ltd. CEO, recently estimated the industry has seen 200,000 to 300,000 people leave, while worldwide, that number is 440,000 jobs cut in the last two years according to Reuters news agency. A study by PetroLMI, which specializes in providing petroleum labour market data and insights, estimates 53,000 direct oil and gas jobs have been chopped the last two years, for a 25 per cent reduction from 2014 employment levels. Indirect job losses are estimated at 132,500 in industry goods and services support industries, primarily in the construction, manufacturing, transportation and other technical and business sectors. In the previous downturn, in 2008-2009, Canada’s oil and gas industry cut approximately 15,000 to 20,000 jobs, mostly within oil and gas services, it says. During that period, layoffs also occurred within the exploration and production sector, particularly due to mergers and acquisitions. For the most part, companies held on to as many workers as they could, in anticipation of a quick recovery and expansion plans. Meanwhile, unlike during the current downturn, oilsands companies actually increased staffing levels. Now, a few thousand people have been hired back — about 10 to 15 per cent of the service workers who had been laid off — and they are in positions “right across the sector,” said Mark Salkeld, president and CEO of the Petroleum Services Association of Canada (PSAC). Several service companies folded during the depths of the current downturn. The survivors are picking up the slack and looking to hire, notes Salkeld. People are needed in areas such as drilling, pumping, testing, environmental, construction and manufacturing. “It’s an uptick right now and there’s a certain level of optimism going into the spring and summer, looking at the producers’ drilling [and] completions programs,” he said.

Rick Major, Publisher Andrea Corrigan, Advertising Sales Manager Greg Nikkel, Editor News Department Phone 306-842-6955 Email: editor@weyburnreview.com reporter1@weyburnreview.com ADVERTISING DEPARTMENT Phone 306-842-7487 Email: production@weyburnreview.com sales1@weyburnreview.com

Black Gold is published by the Weyburn Review and issued at the office of publication, 904 East Ave., Weyburn, Saskatchewan. Mailing address: Box 400, Weyburn, SK S4H 2K4. The Weyburn Review is owned and operated by Prairie Newspaper Group LP, a subsidiary of Glacier Ventures International Corp.

Opinion:

The Weyburn Review is a member of the Canadian Community  Newspapers Association, the Saskatchewan Weekly Newspapers Association and Canadian Media Circulation Audit.

A co-operative spirit is needed

C

anada’s oil and gas industry needs to work together more in a cooperative spirit, as they look to bring in a recovery from an extended time of a slowdown due to depressed world oil prices. This effort is not helped by bickering between the top two oil-provinces in Canada, namely Alberta and Saskatchewan, but then the federal government is throwing fuel on the fire, so to speak, by openly favouring Alberta over Saskatchewan and continuing to pretend that Saskatchewan either doesn’t exist, or doesn’t have the vibrant and active oil industry that it does. The oil and gas industry itself should consider the country as a whole without consideration for borders, as they look at their budgets for the coming year, and plans for developing and producing oil to meet the demands domestically and abroad. One of the projects that could be put in place industry-wide is that of dealing with decommissioned oil wells and pipelines. As Ottawa will only recognize Alberta, there were dollars sent to Alberta for this, even the original idea for this arose from Saskatchewan. The oil industry as a whole would benefit by putting such a program in place to help get some trained oilfield workers back on the job, until oilfield activities in general improve with the

slow but steady improvement of crude oil prices, which have been hovering around the $50 a barrel level for the past few months. But then the disputes between Premier Notley and Premier Wall about trying to keep businesses in their respective provinces kind of muddies the waters a bit. For Saskatchewan, they are understandably trying to attract businesses that may not appreciate the economic climate created by the NDP government in Alberta — but in the end, it depends on the companies as they view the landscape and decide which is the best jurisdiction in which to quarter their head offices and operations. Many of the large companies located in downtown Calgary already have extensive operations in both provinces, and some in B.C. and Manitoba as well, such as Cenovus and Crescent Point Energy to name just two. Many of the companies have been looking for efficiencies wherever they can be found within their own operations during this time of lower oil prices, but once the price starts consistently improving, operations can get going once again, bringing jobs back to the oilpatch throughout western Canada. Perhaps if the provinces as well as oil companies cooperate more, the benefits will be greater when the economy improves once again.


» Global Industry News

BLACK GOLD » April 2017 PAGE 5

» Industry News Briefs Scott Land top buyer of Crown land

Scott Land & Lease Ltd. was the top buyer of Crown land in the first quarter of 2017, spending $78.67 million, with $32.7 million doled out for acreage in Alberta, and $45.29 million in B.C. The broker acquired 112,682 hectares for the threemonth period on behalf of its clients at an average price of $698.16 per hectare. Scott Land picked up 87,867 hectares in Alberta and 23,326 hectares in B.C. The second most active Crown buyer in the quarter was broker Antelope Land Services Ltd., which acquired 3,328 hectares for $11.03 million at an average price of $3,315.23. While most land is acquired by brokers, producer Yangarra Resources Ltd., bidding under its own name, spent $664,289 for 896 hectares at an average of $741.39, all for acreage in Alberta.

March prices lower, but first quarter up

Although prices in March fell for the second consecutive month, 2017 Net Energy Inc. prices for the month increased by up to 46 per cent over March 2016 while first quarter 2017 prices were up by as much as 89 per cent

from the dismal first quarter of 2016. Net Energy Western Canada Select (WCS) averaged US$36.26 per bbl last month, off 8.04 per cent from $39.43 per bbl in February but up 46 per cent from March 2016 when WCS fetched an average of $24.81. The March 2016 price also was a significant improvement from the previous two months when prices averaged only $17.44 per barrel. In the first quarter of 2017, Net Energy WCS prices showed an even more dramatic increase over the 2016 quarter, nearly doubling in price (up just under 90 per cent) to an average of $38.06 per bbl compared to $20.06 per barrel in the first quarter of 2016. Net Energy light sweet prices were down 6.49 per cent in March to an average of $47.15 per bbl from $50.42 a bbl in February 2017 but were 34.71 per cent over March 2016. January-March 2017 prices averaged $48.96 a bbl, an improvement of 61.26 per cent from $30.36 per bbl in the 2016 first quarter.

Total Energy acquires Savanna shares

Total Energy Services Inc. has purchased, through the facilities of the Toronto Stock Exchange (TSX), 110,000

Savanna Energy Services Corp. shares. All of the acquired shares were purchased on April 5, 2017. The highest price paid for the acquired shares was $1.94. During the currency of the offer, Total has purchased on the TSX an aggregate of 1,110,000 Savanna shares at an average price of $1.95. After giving effect to the purchase of the acquired shares, Total owns 62,062,797 Savanna shares.

Environmental assessments need to change

An expert panel tasked by the federal government to review the current environmental assessment (EA) process with an aim of restoring public trust says current assessment processes under the Canadian Environmental Assessment Act are incapable of resolving the often disparate points of view of stakeholders. “Views about federal EA across the various interests ranged from support to all-out opposition … In general, we did not hear strident opposition to the development of projects, although in a few cases there were those who held that certain projects should not have gone ahead,” the task force said in its report released Wednesday.


PAGE 6 April 2017 « BLACK GOLD

Orphan wells, pipelines

PSAC applauds funds in the federal budget The Petroleum Services Association of Canada (PSAC) was pleased to hear the federal government will provide a one-time payment of $30 million to the Government of Alberta to “support provincial actions that will stimulate economic activity and employment in Alberta’s resource sector.” PSAC has been advocating for loans to decommission orphan wells, pipelines and facilities to get workers in this sector back to work following tens of thousands of layoffs, while improving environmental outcomes, reducing carbon emissions, and strengthening Canada’s reputation as responsible stewards of the environment. “We applaud the Government of Canada for hearing us and understanding the challenging economic circumstances faced by our sector and the need to retain skills and expertise so that it can continue to provide the economic contribution to GDP that benefits not only Albertans, but all Canadians. While the amount is less than we had hoped for, any amount helps this beleaguered sector,” said Mark Salkeld, president and CEO of PSAC. “Decommissioning orphan wells, pipelines and facilities for which there are no current owners, would not only create middle-class jobs, the 25 plus types of services involved in this process would also support local businesses such as motels and cafes, and generate income and fuel taxes for governments. In addition, the technologies used can be taken abroad by Canadians to decommission the hundreds of thousands of wells around the world that will require such expertise and services, generating export revenue.” “Orphan well associations collect levies from current industry players to ensure funding for the clean-up of wells where the owners have become defunct. “However, the devastating drop in commodity prices and revenues these past two years have resulted in record bankruptcies, overwhelming the resources of the orphan well associations. “The same impact was felt across the services sector by our members. Loans could be repaid by industry levies while allowing us to take action now, while labour costs are low, providing jobs and the beneficial impact to the environment at the same time ensuring that industry bears the cost of the clean-up,” he added.

Drilling rig ready to go

Review Photo 3122 — Greg Nikkel

An oil rig crew for D2 Drilling Inc. prepares to begin drilling for a new oil well on a well site located south of Weyburn, just west of Highway 35, on a mild spring day. Some drilling rigs have returned to activity this spring with the price of oil hanging around $50 a barrel in recent weeks.

Dominion in talks with Ceres for off-take

Quantum Energy, Inc. announced that its Canadian subsidiary, Dominion Energy Processing Group, Inc., has signed a non-binding Letter Of Intent with Ceres Global Ag Corp. to evaluate the use of Ceres’ Northgate Terminal as an in-take and off-take partnership for the Stoughton refinery in Saskatchewan. “Having this LOI in place has allowed both parties to functionally move forward toward an agreement,” said Keith Stemler, Dominion CEO. “Ceres Northgate Terminal, through its connection to the BNSF Railway, has agreed to assess supplying supplemental Bakken Sweet Crude for the Stoughton Refinery as well as purchasing finished product off-take such as ULS diesel, ULS Gasoline and Jet ‘A’ fuels.”

“Dominion and our Engineer of Record will work closely with Ceres to explore all commodity requirements and Canadian and U.S. logistics to and from the North-

gate terminal,” said Stan Wilson, Quantum CEO. “We are pleased to be working with this dynamic group.” Although there can be no assurances that Domin-

ion and Ceres will enter into a binding agreement, both Dominion and Ceres are mutually working to achieve that goal through this Letter Of Intent.

LOST CHILD TOWING

Providing Oilfield and Farm Services Backhoe • Skid Steer Dozer • Snow Removal Lease Mowing Grading • Gravel Spill Clean-ups Water/Sewage Systems Towing

Hemphill Trenching Ltd.

306-457-2770

Heward, SK

306-457-7322

Email: hemphilltrenchingltd@sasktel.net

~ 24 Hour Service ~ Phone

306-861-0585


BLACK GOLD » April 2017 PAGE 7

Oilfield construction work ongoing

Review Photo 3103 — Greg Nikkel

A crew from Carson’s works on a pipeline maintenance project in the Weyburn Oilfield, in a field site located west of the Cenovus Goodwater plant. With the snow covering gone early this spring, projects like this are able to get started earlier throughout the region.

Investigation of Husky pipeline leak finishes, new measures put in place by government Energy and Resources Minister Dustin Duncan announced that the Ministry of the Economy has completed its investigation of the Husky pipeline incident which occured on July 21, 2016. The findings of this investigation have been provided to the Ministry of Justice. “Since the Husky spill in July, we’ve recognized that we need to do better when it comes to preventing incidents,” Duncan said. “The changes announced today will help ensure that workers and the environment are well protected moving forward.” Though the final report has been provided to the Ministry of Justice, and cannot be released at this time, a statement of substantive findings of the investigation has been provided: The cause of the pipeline break was due to mechanical cracking in a buckle in the pipeline. The buckle was caused by ground movement on the slope which occurred over many years. The investigators have concluded that the slope movement was not a sudden, one-time event. The volume of spilled material is approximately 225 cubic metres of oil blended with distillates. It is estimated that roughly 60 per cent was contained or recovered on land prior to the point of entry into the river. The released volume was independently calculated by the investigators. This volume calculation will continue to guide the provincial response and monitoring of the clean-up. The timeline surrounding the occurrence and reporting of the pipeline failure is as follows: Based on an analysis of the operating data, the investigators have concluded that the leak began on July 20, the day before the discovery of the spill. The pipeline’s dual alarm leak detection systems were issuing notices to the operators of potential problems

prior to the spill and continued until the system was shut down for scheduled maintenance at 7:15 a.m. on July 21. Husky’s response to the alarms has been extensively investigated and the details concerning their reasons for not shutting down the system are being reviewed by the Ministry of Justice. The Government of Saskatchewan was first notified of the spill when a member of the public reported an oil slick on the river near the Tobey Nollet Bridge. This call was received at approximately 8:30 a.m. After obtaining additional information from the caller, two staff members from the Ministry of the Economy’s field office in Lloydminster were dispatched to the bridge at approximately 8:40 a.m. to investigate the source of the spill. They arrived on site at approximately 9:35 a.m. and confirmed there was a significant amount of oil on the river. The source of the oil was not immediately known and staff began a search of the area. Ministry staff also contacted Husky at 9:50 a.m. to advise it of the incident and ask if they had any knowledge of the spill. Husky confirmed that it had also received a report of oil on the river and staff were also looking for potential sources. At 10 a.m. Husky contacted the Ministry of the Economy to confirm the location of the incident at its crossing upstream of the bridge. The broader, multi-agency provincial response was activated at that point with the Ministry of Environment formally assuming overall provincial lead for the response in accordance with long-standing procedures for substantive discharges impacting water bodies. The Ministry of the Economy staff shifted their focus to the immediate clean-up of oil on the right of way and the investigation of the cause of the break. The ministry is taking steps to improve regulations, based on the report’s findings. These steps include:

Axe-Wax Oilfield Services Mobile Chemical Pumping Unit

Through this service Axe-Wax has given clients the ability to expand the type of product used while simultaneously reducing costs and improving safety.

Troy Myers 306-861-6720 Weyburn, SK

The Pipelines Amendment Act, 2016 (Bill 43) will be passed by the end of spring session, which will provide the foundation for strengthening regulatory requirements for pipelines. These changes are broad-based and will address a variety of gaps in the current legislative framework. The Ministry of the Economy will immediately begin work on a compliance audit of the integrity management programs of companies that operate pipelines across major water crossings. This work will build off the inspections conducted last year but will include a review of corporate oversight of these programs. Economy will be working with key stakeholders and third-party experts to develop appropriate regulatory standards for water crossings. The Husky investigations have determined that current regulatory standards and integrity management practices need to be strengthened to fully address the types of risks associated with these locations (slope movement in particular). Economy will also be reviewing the design of legacy water crossings to determine whether additional measures may be needed to manage geotechnical risk. The Husky pipeline was built in 1997 based on the engineering standards of the time. Economy will be working to ensure that any deficiencies in these older designs are addressed by operators in terms of the integrity management practices or new mitigation measures. “We have consulted with industry on these actions,” Duncan said. “Working together, we will ensure the timely implementation of any changes.” While the technical review, conducted in partnership between the Ministries of the Economy, Environment, and the Water Security Agency, with the support of Skystone International, is complete, the full report will be released once all prosecution processes and any appeals have been concluded.

Staying safe is #1 Looking good is #2

We carry a full line of:

• Hard hats • Fire-retardant apparel • Steel-toed boots and shoes • Safety eyewear and much more....

RON’S

THE WORK WEAR STORE LTD.

208 Main Street 112-2nd Street Carlyle Weyburn 306-453-6167 306-842-3006


BLACK GOLD

Dominion’s Stoughton refinery could be up by late 2019

By Greg Nikkel Progress is ongoing to prepare for the construction and operation of the new oil refinery at Stoughton, with the goal to be in operation by November of 2019, members and guests of the Weyburn Chamber of Commerce heard in an update by Keith Stemler, CEO of Dominion Energy Group Processing on March 22. He was the guest speaker for the chamber’s annual President’s Dinner and AGM at the Legion Hall. In his speech to the chamber, Stemler said one of his goals of this startup company is to be completely transparent with the community about what is happening with the project, noting “we are currently in a position where we have satisfied about 2,800 questions out of 3,000” in making the necessary preparations. These include being able to satisfy the investors that this is a viable project, in addition to the many regulatory and environmental processes they will have to satisfy. Once the plant is up and running, Stemler said there would be around 60 full-time positions, divided into three shifts for round-the-clock operations, not including the EMTs that will be on duty. Among the arrangements that have to be made is signing an agreement for the off-take from the plant, and engaging an Engineer of Record (EOR) as this will be a huge project. Stemler said the EOR doesn’t yet want their name out there yet because of the deluge of calls and emails they would then receive. Stemler noted that after he held a meeting with contractors on Feb. 15, he asked that they not email

goes well, the plan is to tentatively be starting production by November of 2019, or by early 2020 if there are delays. Once production gets rolling, the capacity will be 42,100 barrels a day of refined crude oil. Showing how the plant will be set up on the site, to be located adjacent to Crescent Point Energy’s Viewfield gas plant, part of the design will prepare for a future requirement of the federal government to increase the ethanol content of gasoline in Canada from 10 to 15 per cent. “We’re putting in that huge building kit so we don’t have to retrofit the plant in the future. When other plants go down for retrofitting, we’ll be ready to go,” said Stemler. On the plant construction side, he estimates a staff of over 200 during the construction phase with as many as seven different disciplines on site at any given time. The estimated cost of construction will be around $575 million, and Stemler noted the cost to run the plant for the first 90 days will be about $155 million. A safety talk at the Chamber meeting Review Photo 1479 — Greg Nikkel Part of the reason for that is, the plant will need Brad Wheeler, standing at left, gives a short talk on the importance of safety in the oilfield just prior to a pres- to purchase a supply of oil to hold in storage for the entation by Keith Stemler, CEO of Dominion Energy Processing Group at the Weyburn Chamber of Com- startup of the refinery. It will have to be heated to merce’s President’s Dinner and annual meeting on March 22. Wheeler is an employee of Cenovus Energy, about 1000 degrees, and with two lines of oil being and is well-versed in the procedures and importance of workplace safety in the oilpatch. processed at once, a total of 3,400 barrels an hour will be processed. him with questions after — and he subsequently reIt’s a small cost to pay,” said Stemler, noting that the Asked when the training for workers will need ceived 7,400 emails, “sometimes 20 from the same EOR is a worldwide company with a strong reputo start in order to prepare for the plant’s opening, place”. tation, considered one of the top five engineering Stemler said the first modules for operator training “The EOR is responsible for everything that hapfirms in the world. will need to start by January of 2018, with the compens in the plant for the first year. We’ll pay an enorIf everything goes well in preparing for the starpany supplying the specialized refining equipment mous amount of money to do this, but it’s worth it. tup of construction, and then the construction itself bringing in the modules to train the employees.

Black gold  

April 2017 Edition Weyburn, Sask