The Alberta provincial government has granted oil companies a three-year municipal property tax break to help them cope with the latest crisis, which hit before they had managed to recover from the last one, making their situation even more precarious than that of oil companies elsewhere.
“Supports to energy companies will include an exemption from property taxes for three years when drilling new wells and building new pipelines,” the provincial government said in a news release. It will also cancel a well drilling equipment tax for local energy companies.
In addition, the Alberta government said it would lower tax assessments for wells with lower productivity and maintain a 35-percent reduction in tax assessment rates for shallow gas wells that was introduced earlier this year.
“We are acting now to encourage new oil and gas development that will create jobs and boost Alberta’s recovery,” minister for municipal affairs Tracy Allard said. “Alberta needs to be as competitive as possible to attract investment into our communities. We know our municipal partners are committed to do their part to create jobs and support Albertans through this challenging economic time. We are working to secure a brighter future for our province by supporting both industry and communities.”
Another effort to stimulate the struggling local energy industry was announced earlier this month when the provincial government said it would resume oil and gas lease sales before the end of the year in a bid to attract investments.
After oil prices crashed in March, Alberta moved in early April to defer all public offerings, that is land sales and direct purchases of petroleum and natural gas and oil sands mineral rights, for a period of at least 90 days.
Alberta, which has seen its revenues shrink with the collapse of oil prices and the downturn in the industry, now hopes to resume those land sales by the end of 2020, even if the market sentiment in general and in Canada’s oil patch is still gloomy.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.