Bankrupt Oil Firms Must Clean Up Inactive Wells

Canada’s Supreme Court ruled on Thursday that bankrupt oil companies must clean up inactive wells, overturning lower court decisions that prioritized paying creditors and potentially raising the risks of investment in the industry, Reuters reported. The 5-2 ruling means that the Alberta Energy Regulator, which had appealed the earlier court decisions, can order the cleanup of inactive wells even when their owners have filed for bankruptcy protection. “Bankruptcy is not a license to ignore rules,” the court said in a written decision. Alberta had 3,127 wells requiring cleanup that had no financially responsible owner - sites that are called orphan wells - as of late January, according to the Orphan Well Association, which is funded by levies paid by Canadian oil producers. The ruling reduces the cleanup burden on the association, which is overseen by the regulator, but may raise the perceived risk of investing in the Canadian oil industry. Read more