The oil and gas industry alone generates 15,000 direct jobs in the region and supports an estimated 500 businesses. And it could get much bigger, due to expansion of horizontal drilling in the giant Bakken oilfields.
Bakken is being touted as one of the largest oil reserves in the world on the U.S. side of the Saskatchewan border, but it is also a major Canadian play. The Bakken field straddles a large swath of southeastern Saskatchewan and is shaping up to be the largest light-oil pool discovered in Western Canada in more than 60 years. It holds at least one billion barrels of oil, about 25 per cent of which can be recovered.
Already the formation is yielding about 12,100 barrels a day on the Canadian side - 4,000 barrels a day in Saskatchewan and 8,100 barrels a day in Manitoba - from about 520 wells, according to Canadian Discovery Ltd., a Calgary-based firm that tracks Canadian exploration activity.
"For a light oil play the Bakken is probably the top play in Western Canada," Rick Morgan, exploration analyst at Canadian Discovery, told the Financial Post. "People have started comparing it to the Pembina Cardium, the largest oil pool developed in Western Canada."
Horizontal drilling involves pushing a drill bit vertically through the earth's crust for part of the way, then directing it horizontally to capture more of an oil pool. Fracture stimulation involves injecting sand-laden fluids at high pressure to fracture the rock and make it more permeable. Widespread use of horizontal well drilling was pioneered in Saskatchewan, the Saskatchewan Research Council playing a substantial role in the research and development of the technology.
There are also two major coal mines and power stations in southeast Saskatchewan, with a total of 600 workers.
The conventional agriculture community remains an economic engine in the area. There are 4,130 farms in the southeast, including some of the largest in the province. In fact, the average farm size is 3,390 acres, about 17 per cent bigger than the average in Saskatchewan. And the income is also higher, at an average of nearly $140,000 in gross farm receipts annually.
Estevan
There is now a push across southeast Saskatchewan to develop a comprehensive development strategy for the region that embraces agriculture, resources and trade.
"Your RM is taking the lead to get ahead of the curve and that is tough to do," said Tim Cheesman, a community planning consultant from Regina who was in Estevan to help lead an discussion on the area's potential.
"We're attempting to determine where growth should go and provide some criteria to assist," Cheesman told RM councillors, Reeve Kelly Lafrentz and residents who packed into the council chambers to hear the presentation.
He later told the Estevan Mercury that his company has been working on the RM plans for the past eight months and they should be completed to the point where they can provide an official community plan by February 2013, and that would include a zoning bylaw.
Village purchased
Meanwhile, more direct action is being taken in smaller towns in the southeast.
Corus Land Holdings, an affiliate of Ceres Global Ag. Corp., recently bought the entire hamlet of Northgate, snapping up all 168 townsite lots, about 60 acres, for a reported $118,000, plus some neighbouring farm lands. Ceres is a publicly traded company that owns grain-handling facilities in Minnesota, North Dakota, Ontario, Wisconsin, Wyoming and New York.
John Gould, CFO for Ceres, did not say what the land would be used for, but with Corus and Ceres being affiliated with Riverland Ag Corp., a Minneapolis-based grain-storage and marketing business, the speculation of a major grain-handling facility being constructed on the site is running rampant.
With nearby railroad tracks available and a former modest grain car loading facility already in place, the rumours appear to be leaning toward a facility that would accommodate the sale and transportation of Saskatchewan grains to an American storage and/or processing facility, now that an unrestricted grain market exists in Canada with the demise of the former Canadian Wheat Board's monopoly.
Gould confirmed the Toronto-based development company had received approval for the purchase from the Saskatchewan Farmland Security Board. This is necessary for anyone from outside the province wishing to purchase more than 10 acres of farmland in Saskatchewan. A Richardson Pioneer elevator is located in Northgate but it has been sitting unused for several years, while a General Mills elevator is situated on the North Dakota side. Further rumours are being fuelled by Corus/Ceres' 25 per cent ownership position in the Stewart Southern Shortline Inc., a shortline railroad that Corus planned to use to ship 40,000 barrels of oil daily by year-end 2012.u
– With files from the Estevan Mercury
from Western Investor January 2013
