Early in 2020, Shell initiated a well license transfer with the AER to transfer licenses of deep sour gas wells and pipeline licenses to Pieridae Energy, which was subsequently blocked by the AER, saying it went against the intent of environmental laws.
Once again, this time early in 2021, Shell is trying to offload wells and pipeline licenses on to Pieridae. Terms of the sale would have seen Shell responsible for existing contamination, and Pieridae on the hook for future problems of the wells and pipelines.
It should also be noted that the size difference between the two companies is quite vast.
The 2020 application was blocked on the AER’s concerns over Environmental Protection and Enhancement Act (EPEA), as both companies agreed to split regulatory liabilities, citing cleanup concerns, and that it wasn’t pleased with how the deal would have split liabilities.
The AER’s decision also mentioned that the company that made the mess should therefore clean it up, also saying that the two sides were free to restructure their deal to get the transfers approved.
In total, the transfer was for 284 wells, 66 facilities, and 82 pipelines. The applications for 2021 are below:
Application 1931841 includes 96 wells, 18 facilities, and 34 pipeline licenses.
Application 1931842 includes 85 wells, 27 facilities, and 23 pipeline licenses.
Application 1931843 includes 101 wells, 25 facilities, and 24 pipeline licenses.
The 2020 decision was opposed by many oil and gas producers who pressed the AER, and one has to wonder how these applications will be received, and what the outcome will be.