This month, the provincial government received $1.9 million in proceeds from oil and gas land sales in northeastern B.C.
It’s a welcome change from February, when for the first time ever, the government received zero dollars from the monthly oil and gas land auctions.
But natural gas experts say it shouldn’t be an indication that B.C.’s oil and gas industry is going to rebound anytime soon.
“There’s probably not going to be a future in gas sales for a number of years,” said Art Jarvis, Executive Director of Energy Services BC.
“I don’t predict any great land sales for quite a while. I’m really frightened, and most of us are, about the longevity of this wait period.”
Monthly auctions of land for drilling has been a steady source for the provincial government for many years, with an average of $363 million per year in tenders from 2010 to 2014.
Last year, however, that figure dropped to just $18.4 million, and the government is budgeting for a similar amount over the next three years.
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“We need the oil price to go up,” said Jarvis, adding companies aren’t purchasing new drilling rights because they anticipate low prices in years to come.
“The producers are oil and gas companies, [but] their gas drilling is funded by their oil revenues in other areas. When oil was $100 a barrel, they had cash to spend, now that the oil pricing is down, they’re hurting.”
With the Peace River region of B.C. heavily dependent on the natural gas industry, Jarvis says a turnaround – whether it comes from oil and gas prices, or the province’s nascent LNG industry – is important.
“It means the difference between [people] putting food on their table or not. What the land sales mean to the whole province is that’s where the money goes, to the province. But the actual activity of the work generates income up here.”