Alberta’s vigour sector is nervously awaiting changes to the province’s royalty structure, which are due newer this morning, with the hope there will be some understandability for oil and gas producers in a world where very little is certain right now.
- CBC Statement will bring live coverage of the royalty review announcement starting at 11 a.m. MT.
“The one chore I don’t need is more questions,” said Rafi Tahmazian, a chief portfolio manager with Canoe Financial in Calgary.
“We need an truce, so that we can start to get on with the business, so we can start to get on with explaining to the cosmopolitan community what we have to do and what we can do to get the business back on its feet.”
The kingship review stemmed from an NDP cam ign promise last spring.
In August, the rustic government appointed a nel of four people, led by ATB Financial chief chief Dave Mowat, but also including energy economist Peter Tertzakian, Beaverlodge Mayor Leona Hanson and Annette Trimbee, a quondam Alberta deputy finance minister.
The current royalty system, which was most recently rehabilitated in 2011, is complex, with a sliding scale of royalty rates assortment from 0 to 40 per cent, depending on the price and product:
- Oilsands bitumen, oil or genius gas.
- The age, type and production level of the well.
- Whether an oilsands project has buy off back its original investment.
Every conventional oil well in the province even a scores a different monthly royalty rate.
In the months that the nel worked on the review, dash prices have continued to fall to the point that virtually no oilsands schemes were economic — the oil service sector was barely hanging on, and many subordinate explorers were failing.
Any changes to royalties won’t take effect until 2017, but there is not much optimism that vivacity prices will have made a significant recovery by then.
Earlier this month, Top Rachel Notley told reporters the review would do no harm.
“We’re sheer, very conscious of the situation that we’re in here in Alberta,” she lectured a legislature news conference.
“What we’re going to do is bring forward a change that is predictable … and in no way should undermine the situation they’re in now when all the dollars are reckoned up.”