Troubled oil association in receivership, puts N.W.T. Cameron Hills cleanup in jeopardy

A uneasy oil and gas association that has wells in a Northwest Territories has left into receivership, and a territory’s oil and gas regulator is worried taxpayers will be left to purify adult a property.

Strategic Oil and Gas Ltd., formed in Alberta, has been underneath creditor insurance for 10 months, though a efforts to restructure have failed, a directors have quiescent and it is now winding down and offered off all of a assets.

But a Office of a Regulator of Oil and Gas Operations (OROGO) for a territory has grave concerns about a company’s devise to transition from creditor insurance to receivership. Those concerns are laid out in a Jan. 28 confirmation submitted by OROGO’s arch charge officer to a Alberta Court doing Strategic’s dissolution.

“Of sold regard to OROGO is a idea … that all of a Cameron Hills Wells can safely be left in their stream condition for an unfixed duration of time, as a transition devise provides that Strategic’s goal to ‘defer formerly scheduled cessation and abandonment work,'” Pauline de Jong says in her affidavit.

The Cameron Hills devise sits nearby a N.W.T.-Alberta border, south of Kakisa, N.W.T.

Another worry is that Strategic’s plan makes no discuss of a requirement to approve with an sequence released by a N.W.T. regulator late final year.

Outstanding orders

In a Oct. 14, 2019 order, then-regulator Louis Sebert told Strategic to correct and exam an aged good that was leaking lethal hydrogen sulfide gas. 

“As a Cameron Hills Field is a green gas (hydrogen sulfide) field, an rash recover from a I-73 Well, or any other good in a Cameron Hills Field might embody a recover of H2s (hydrogen sulfide), that is poisonous to humans and poses a risk to flora and fauna in a area,” he wrote.

Shortly after, as a proxy measure, Strategic commissioned a green gas scrubber, that uses chemicals to mislay hydrogen sulfide from a gas evading a well. Sebert set Apr 1, 2020, as a deadline for henceforth regulating a problem. According to a guard with KPMG, the accounting organisation doing a restructuring of Strategic, a association is on lane to accommodate that deadline.

In his report, however, the guard says zero about Strategic’s ability to accommodate deadlines Sebert set for final closure of 40 other wells and a tube entertainment complement during Cameron Hills.

H2s (hydrogen sulfide) … is poisonous to humans and poses a risk to flora and fauna in a area.– Louis Sebert, former oil and gas projects regulator

Last summer, an MLA lifted concerns about taxpayers being saddled with a cost of doing that work.

Frame Lake MLA Kevin O’Reilly forked out that KPMG estimated that a association due a N.W.T. supervision $12.4 million in “end of life” obligations compared with a Cameron Hills project. In regulatory filings, Strategic says it has posted $3.9 million in confidence for a project.

In an email to CBC, a territorial supervision pronounced it does not know how KPMG came adult with a $12.4 million figure.

Restructuring devise rejected

In a restructuring devise Strategic due late final year, it pronounced it had reached a understanding to sell a Cameron Hills property. But a Office of a Regulator of Oil and Gas Operations identified problems with that plan.

Sebert forked out that his bureau was not given a duplicate of a terms of a squeeze and was disturbed it would soothe Strategic of a obligations to purify adult a Cameron Hills operation.

Sebert wrote that his bureau had reviewed a financial information supposing by a impending purchaser, Tallahassee Resources Inc., and had concerns that it “is not in a financial position to be means to finish a required cessation and abandonment of wells and decommissioning of infrastructure.”

The Alberta Energy Regulator also had problems with Strategic’s restructuring plan. According to a news from a guard overseeing a restructuring, it also released an sequence to Strategic. On Jan. 20, it systematic Strategic to post a $48.7-million confidence deposit for liabilities in that province.

The guard pronounced he accepted Alberta had no picturesque expectancy of Strategic profitable adult and that a step was required to rivet a module a range has for traffic with supposed “orphan wells” — those owned by companies that do not have a financial resources to decommission them.

Article source: https://www.cbc.ca/news/canada/north/strategic-oil-and-gas-in-receivership-1.5467922?cmp=rss