oil royalties for alberta

[Stephen1151]

Alberta Premier Ed Stelmach has pledged to respond to the recommendations by mid-October.

Like other companies that have already issued dire warnings about the potential consequences, EnCana insisted Friday that it is willing to accept royalty increases, but not as large as those proposed.

"We are open to changes to Alberta`s royalties — changes that reflect the economic realities of volatile commodity prices, higher costs and the appropriate risks and rewards of long-term capital investments," Mr. Eresman said in the release. "A royalty system can be developed that achieves Alberta`s objectives without so severely damaging the province`s future."





I pulled this article off the globe invstor website...do you think that this will have an ecomomic impact in alberta if preimier ed starts taxing oil companies more???

 

[GlennLasiuta]

It is from my understanding that Premier Stelmach has been quoted saying "I will not let `Big Oil` push me around", or something to that effect. Well, for Alberta`s economies sake, if he will not be `bullied`, I hope he has at least enough sense to try and negotiate better terms with the companies. Not sure if this action is spurred by his insatiable appetite for votes or not, but the increases he proposed are indeed unreasonable.

The companies will/should be willing to agree upon a reasonable amount of royalty increases, but for the sake of making a few (billion) quick bucks, I really don`t blame the companies for being upset. It is this short-sighted/short-term thinking that could potentially `scare` off investors. But really, where else are they going to go? Iraq? Mexico? Let`s be realistic Mr. Stelmach!

 

[BMironov]

Hello,



It is interesting time in Alberta, I believe.



You can get more sense of media from the following topic on MyREINspace:

http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-702-Oil_and_Gas_Industry_Discussion.html



So far:

- Premier said that he wants $2B per year (he did it via "review" and now watching what industry will say)

- Today EnCana said today that they will slash $1B in spending from Alberta if Premier will implement his plan.

- Mackenzie calculated that premier's plan will wipe out 30% of investments from province on the long run.

- 2 other companies Exxon & Murphy taking federal government to court over breaking NAFTA treaty



This why some newspapers invented 2 names for Alberta: Albertastan and Albertazuela

 

[NickStewart]

QUOTE (Glennith @ Sep 28 2007, 02:03 PM) It is from my understanding that Premier Stelmach has been quoted saying "I will not let `Big Oil` push me around", or something to that effect. Well, for Alberta`s economies sake, if he will not be `bullied`, I hope he has at least enough sense to try and negotiate better terms with the companies. Not sure if this action is spurred by his insatiable appetite for votes or not, but the increases he proposed are indeed unreasonable.

The companies will/should be willing to agree upon a reasonable amount of royalty increases, but for the sake of making a few (billion) quick bucks, I really don`t blame the companies for being upset. It is this short-sighted/short-term thinking that could potentially `scare` off investors. But really, where else are they going to go? Iraq? Mexico? Let`s be realistic Mr. Stelmach!

There`s a great article today at Globe ROB http://www.reportonbusiness.com/servlet/st...BNStory/robNews

QUOTE Pity Alberta`s oil sands producers. It must be hard for them to know which hat they`re wearing, the snazzy Stetson they don when they tell investors how rich they are or the beggar`s cap they hold out when they argue against paying higher economic rents.

Big Oil needs to make a lot of noise against the proposed increases to show their shareholders that they are doing their job.

Stelmach needs to talk tough and stand up to Big Oil to show his electorate that he`s doing his job.

At the end of the day, even if the full proposed increase goes into effect, you said it yourself "where else are they going to go? Iraq? Mexico?"... the more I read about world oil supply vs. world oil consumption, the more I realize that Alberta`s future is solid. There may be short term hiccups, but long term, we`re one of the few games left...

My guess, "some" of the proposals go in, companies grumble a lot, pay a little more, still make gobs of money, and Alberta is STILL the best place in the world to be investing...

Nick

 

[GlennLasiuta]

QUOTE (NickStewart @ Sep 28 2007, 03:20 PM) There`s a great article today at Globe ROB http://www.reportonbusiness.com/servlet/st...BNStory/robNews



Big Oil needs to make a lot of noise against the proposed increases to show their shareholders that they are doing their job.

Stelmach needs to talk tough and stand up to Big Oil to show his electorate that he`s doing his job.

At the end of the day, even if the full proposed increase goes into effect, you said it yourself "where else are they going to go? Iraq? Mexico?"... the more I read about world oil supply vs. world oil consumption, the more I realize that Alberta`s future is solid. There may be short term hiccups, but long term, we`re one of the few games left...

My guess, "some" of the proposals go in, companies grumble a lot, pay a little more, still make gobs of money, and Alberta is STILL the best place in the world to be investing...

Nick

Hey Nick. Great way to state it! The fundamentals don`t lie. Everyone has to be made accountable to their best interests (shareholders vs. voters). Canada is (if I`m not mistaken) the only country that has actually LOWERED their oil consumption, which is great for us. Going back to the old adage `don`t get high on your own supply`, I`m glad to hear that options for nuclear energy are opening up in Alberta. Now, if more countries could do that, we would be able to mitigate supply/demand ratio`s to a sustainable level, and increase the lifespan of our reserves.

The companies WILL grumble, but ultimately, Alberta is as solid an investment vehicle as it gets.

Great article too. Thanks...

 

[NickStewart]

QUOTE (Glennith @ Sep 28 2007, 02:28 PM) Hey Nick. Great way to state it! The fundamentals don`t lie. Everyone has to be made accountable to their best interests (shareholders vs. voters). Canada is (if I`m not mistaken) the only country that has actually LOWERED their oil consumption, which is great for us. Going back to the old adage `don`t get high on your own supply`, I`m glad to hear that options for nuclear energy are opening up in Alberta. Now, if more countries could do that, we would be able to mitigate supply/demand ratio`s to a sustainable level, and increase the lifespan of our reserves.

The companies WILL grumble, but ultimately, Alberta is as solid an investment vehicle as it gets.

Great article too. Thanks...

You`re quite welcome. If you want to bone up more on the whole oil supply/consumption issue, I strongly recommend two sources...

One, a TV Documentary called "Crude Awakening" - you can find a trailer for it here - http://www.youtube.com/watch?v=Or-TyPACK-g

And two, a book called "A Thousand Barrels A Second" - do a search on Amazon (I tried to put a link but it was 3 lines long and got cut off)

(Normally I recommend Chapters instead of Amazon, but with the CDN$ right now Amazon`s the place to go)

Once you see/read those, you will be desperate to buy as much in Alberta as you can!

Nick

 

[mcgregok]

Any comments now that Premier Ed Stelmach has made his royalty plan known ? Checked the stock prices (encna, petro canada etc) Did`nt seem to move much.

 

[NickStewart]

QUOTE (mcgregok @ Oct 25 2007, 05:51 PM) Any comments now that Premier Ed Stelmach has made his royalty plan known ? Checked the stock prices (encna, petro canada etc) Did`nt seem to move much.


What I`ve been reading is that the stock prices have already taken higher royalties into account. The only way they would have had a drastic change would have been if none of the recommendations would have been implemented. Then they would have jumped 20% by some estimates.

Lots of noise, lots of newspapers sold, lots of fear in the masses, and at the end of the day (as Don says elsewhere) a year from now this boogie man will be long forgotten.

 

[mortgageman]

QUOTE (NickStewart @ Oct 25 2007, 08:02 PM) What I`ve been reading is that the stock prices have already taken higher royalties into account. The only way they would have had a drastic change would have been if none of the recommendations would have been implemented. Then they would have jumped 20% by some estimates.

Lots of noise, lots of newspapers sold, lots of fear in the masses, and at the end of the day (as Don says elsewhere) a year from now this boogie man will be long forgotten.

The Parkland Institute is saying Stelmach didn`t go far enough. The oil industry is crying foul and doom and gloom.
Stelmach has probably made a decent decision if both polarities are upset. Life will go on and so will Alberta`s strong economy.

 

[DonCampbell]

Isn't it strange that REIN Members already knew what was going to happen.



Remember to read the Oil & Gas thread that I started when this Review was started a few weeks ago.



Here is today's post: No surprises in the Stelmach announcement. Now comes the already prepared fall-out:



#1 The two opposition leaders ranting about how Albertans are getting ripped off (they haven't even done the math yet!)



#2 Certain oil and gas companies stating that deals are now on hold



#3 Media will be doing their best to focus on the $464million less than the $2Billion that the review board recommended.



#4 Sadly, there will be some layoffs in the oil service industries



#5 Good news for Saskatchewan as some of the smaller oil / gas companies shift their focus to spread their risks. Sask government will eventually go through their own review (heck it worked for AB and Newfoundland!)



#6 1 year from today we'll have forgotten this had even happened and those of us who saw it as another boggie man in the closet and bought while property was on sale will once again be labelled 'lucky'



Enjoy the ride!!

Here's the rest of the link discussion with the REIN Member discussions:

http://myreinspace.com/rein_members_only/Members-Only_Discussion/81-702-Oil_and_Gas_Industry_Discussion.html ENJOY!