CALGARY, Alberta, Feb 15 (Reuters) - The Alberta Energy Regulator (AER) suspended licences on all oil and gas well facilities and pipelines belonging to Lexin Resources Ltd on Wednesday, nearly doubling the number of orphaned wells in Canada’s main crude-producing province.
The provincial regulator ordered privately-held Lexin to cease all production, saying it failed to comply with multiple orders and lacked enough staff to manage its more than 1,600 sites.
Calgary-based Lexin also owes more than C$1 million to Alberta’s orphan fund and more than C$70 million in security for its obligations to clean up its oil and gas facilities at the end of their producing life.
“The AER has little confidence in Lexin’s ability to conduct its operations safely and is taking measures to prevent increasing public safety, environmental, and financial risk,” the regulator said in a statement.
Alberta’s Orphan Well Association (OWA) is responsible for cleaning up wells that have no owners financially able to deal with abandonment and decommissioning costs. It is overseen by the AER and funded by levies from the oil and gas industry.
The enforcement action by the regulator means the 1,380 wells belonging to Lexin are now the responsibility of the OWA, taking the total numbers of ownerless wells awaiting clean up in Alberta to 2,970.
Prior to Wednesday’s order there were 1,590 orphan wells in Alberta. (Reporting by Nia Williams; Editing by Tom Brown)