The Alberta government in Canada has announced a funding of CAD400m ($315.9m) to help in the cleanup of inactive oil and gas sites across the province.

It will provided in two new rounds of the federal CAD1bn ($789.74m) Site Rehabilitation Program.

The provincial government said that it will allocate CAD100m ($78.97m) of the funding for the clean up of inactive oil and gas sites in Indigenous communities across the province.

The funding further breaks down to CAD85m ($67.13m) for First Nations reserves and the remaining CAD15m ($11.85m) for Metis Settlements to work with licensees to close sites situated on or around their lands.

Alberta Minister of Energy Sonya Savage said: “The Site Rehabilitation Program is cleaning up legacy oil and gas sites across the province and creating thousands of much-needed jobs. As stewards of the land, this funding will ensure that Indigenous people benefit from resource development on land that was first inhabited by their ancestors.”

A second funding round of CAD300m ($236.92m) will be offered to oil and gas firms which produced in 2019 and had paid for closure work in either 2019 or 2020.

According to the Alberta government, the funding will help the contractors and licencees to work on closure projects of all scopes and sizes. This will result in the cleanup of a substantial number of oil and gas sites across the region, said the government.

Under the Site Rehabilitation Program, only projects which are taken up from May 2020 will be funded. The programme is mainly funded by the Canadian government’s COVID-19 Economic Response Plan.

Alberta had earlier made CAD400m ($315.9m) in SRP grants available to eligible applicants since the programme’s launch in May 2020.

Overall, the programme is anticipated to create nearly 5,300 direct jobs and provide indirect employment and economic benefits throughout the province, said the government.

So far, the government has allocated CAD310.3m ($245m) of grant funding to 633 Alberta-based firms for periods 1 through 4 of the programme.

Petroleum Services Association of Canada (PSAC) interim president and CEO Elizabeth Aquin said: “Closure work creates jobs and positive environmental outcomes that enhance Alberta’s ESG record and provides valuable economic benefits to rural communities.

“PSAC has long advocated for a mechanism to accelerate the decommissioning of orphan and inactive sites to provide the sector with jobs during this prolonged downturn.

“We are pleased that the Governments of Canada and Alberta have heard us and responded with this important program.”