SR&ED in the Oil & Gas Industry
The OGES industry is comprised of two main sectors and further sub-sectors:
- Services Sector includes: Geophysical Prospecting, Contract Drilling, Pumping, Pipeline Services, Field Processing, Transportation, Engineering, Geomatics, Marketing, and Other Services
- Manufacturing Sector includes: Drilling Equipment, Drilling Consumables, Pipeline Equipment, Storage, and Oil Sands Equipment
The mining, quarrying, and oil and gas extraction sectors have seen an increase in GDP between 2001 and 2010 of $2.7 billion. While there is more emphasis placed on renewable energy sectors, we cannot deny that the oil and gas industry in Canada still is a huge part of our country.
Not only does this industry focus on the extraction of oil and gas, but also on the design and development of equipment, technology and maintenance systems – these focuses have to work together for continued success in this industry.
During the design and development of equipment, technology and maintenance systems, you can run into technological obstacles, where experimentation and testing need to be completed in order to reach a satisfactory result. This testing and experimentation is where Canada's Scientific Research & Experimental Development program comes in.
The SR&ED tax credit definition specifically excludes the direct "prospecting, exploring or drilling for, or producing, minerals, petroleum, or natural gas." However, SR&ED in this sector can often be found in supporting activities, especially if existing products or processes have been modified or improved.
You May Be Eligible If:
- You have manufactured any new components
- You have developed any hydraulic systems, storage winches, A-Frames, flexible pipe laying systems, or chain tensioners
- You have invested in any automation engineering
- You have developed any steam generation systems
- You have implemented any carbon recapture systems