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DOB Exclusive: Turning O&G Asset Liabilities Into Opportunities

Wednesday, March 18, 2020

Read the Daily Oil Bulletin article on turning O&G asset liabilities into opportunities. In the article “Turning O&G Asset Liabilities Into Opportunities: Sproule’s Three-Phase Model” Randy Green comments on an opportunity to empower stakeholders.  According to Green, decommissioning obligations may have an overwhelming impact on the viability of Western Canada’s oil and gas industry, but he also sees a chance to empower stakeholders. “This is a very unique situation, where we have some significant challenges, but we can turn those challenges into opportunities,” says Sproule’s asset management senior vice-president. Green notes decommissioning obligations can create jobs, GDP growth and fulfill ESG mandates. Alberta alone has around 195,000 wells that are either legacy (producing wells greater than 10 years old), suspended or inactive wells. The liability associated with these wells, including associated pipelines and facilities equates to roughly a $19.5 billion.  The magnitude and timing of dealing with these obligations poses risk and uncertainty, which in turn creates investment hurdles for the energy sector, already reeling in recent weeks.

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