FORT ST. JOHN, B.C. – B.C.’s Natural Gas Development Minister says that though the government is forecasting a substantial drop in revenue from land rights sales and leases in the next three years, that doesn’t necessarily mean a decrease in oil and gas activity.
According to last Tuesday’s budget, the provincial government is forecasting that revenue from Energy, metals, and minerals will be decreasing from $1.2 billion dollars last year to $837 million in three years. Of those areas, the government says that revenue from natural gas royalties will increase by 49 percent from $159 million in 2016/2017 to $291 million by 2019/2020. However, the numbers in last week’s budget shows that revenue from the sales and leases of Crown land drilling rights will drop off dramatically. Last year, the province brought in $623 million from land rights sales, but this year’s revenue is forecast to only bring in $353 million. By 2020, land rights sales and leases will only be bringing a project $164 million into provincial coffers.
Despite this drop in revenue, Natural Gas Development Minister Rich Coleman said last week that the government does not expect that this is a sign of another slowdown in the oil and gas industry. “I think you’re going to see increased activity because there’s been some movement on the price on natural gas so we are predicting an increase in revenue royalty-wise from natural gas and natural resources this year,” Coleman told reporters at the legislature. “At the same time you may not see the land sales particularly go up, so that’s why we’ve booked them to go down a little bit because a lot of people have already taken their position particularly in the Montney and other fields up in the Northeast part of the province. We expect activity to go up because there’s gonna be some changes and some other opportunities, but we don’t think the land sales are gonna necessarily go up because a lot of people have already invested millions of dollars in buying leases from government: land leases that we’ve put out in the market in the previous six to ten years. I would expect that if it continues in the pattern that we get, and if we get successful on some LNG in addition to the Northeast we’ll do even better. But we’ve actually targeted the fact that there will be some increased activity in the Northeast next year.”