Albertastan Is Coming

Posted on Monday, September 24 at 14:07 by N Say
The Canadian oilpatch plans to challenge a controversial report this week that says Albertans aren't getting their fair share of oil and gas revenues and that recommends a major boost to provincial royalties.

The energy industry has been up in arms since last week's release of the much-anticipated royalty review report, with one senior executive calling it "draconian," as stock prices drifted downward.

The Canadian Association of Petroleum Producers, which speaks for almost all the big oil and gas companies, said its thorough review of the panel's findings revealed "several fundamental concerns" that have a significant impact on the results and recommendations.

Greg Stringham, vice-president of markets with the producers association, said his Calgary-based group will release its findings to the Alberta government and the public early this week.

"The industry can hardly believe the extent of the changes" suggested in the report, Stringham said.

"And more fundamentally, it cannot understand how the panel can assume that these recommendations wouldn't affect activity levels, investment and future jobs in making their projections for future revenue increases."

Some oil analysts compared the measures to those taken in Venezuela and former Soviet-bloc countries, where royalty regimes change without warning, generating the mocking title of "Albertastan."

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[This is hilarious. Almost all the oil companies, in their submissions to the panel, cited a 1997 study by Pedro van Meurs, an extremely well-respected specialist in the royalty regimes. In 1997 the he said Alberta's royalty system took too much from the producers, but what the oil companies didn't know is that the same guy, in 2007 doesn't take nearly enough! LOL & in Chevron's submission to the panel they even said Alberta isn't getting as much as they could, I could hardly believe that. I'm sure the multinationals could live with whatever changes take place. They've been nationalized & probably had their employees attacked etc in other countries, & the panel's recommendations aren't nearly that bad. The companies that would really have a problem with any changes are the small- to medium-sized ones that only do business on North America and would like to treat the US as just another Canadian province (or the other way around). [Proofreader’s note: this article was edited for spelling and typos on September 25, 2007]

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