Royalty Review

[Billy Boy]

Let me get this straight; The Liberals are now defending the fledgling Oil industry in Alberta by saying that the Government has to have a Provincial Royalty formula that is fair and will help the Oil Industry to survive and thrive within the province. Was it not just a few years ago that the Liberals were leading the parade to make those Money Grubbing Multi-National Oil Companies pay there fair share by paying a higher Royalty fee for doing business in Alberta? It is amazing how a political party will change its stripes for a few votes!!!!!

Billy Boy

 

[rigrat]

The Liberals will say anything to get votes and Stelmach knows he better straighten out the royalties or he is gone (probably is anyway). Last couple of Alberta land sales were excellent and oilfield stocks are doing good today, all a good sign for a change.

 

[Billy Boy]

Lets hope the patch is on the up-swing as for Stelmach and the Conservatives I think the damage has already been done.

Billy Boy

 

[Longhorn]

We are even seeing some increase in business in the forgotten south. But yes, Stelmach is a goner for sure, in fact Im not so sure that the Conservatives will even survive this whole ordeal. Too bad Danielle doesnt really have a platform yet, but I think its coming...

And yea, the Libs are a joke, but it has gotten so bad in the industry that even the union jobs have dried up, so the Libs have taken a stand (a little late). The big joke down here is 'You know its slow when even the Newfies leave town'...and we will need them back, guys are already having a hard time filling some positions. Huge labor force that has been relied on has left town and headed east...Hope some come back!

This afternoon should be interesting...It will be a good gauge of Stelmach, and is he really listening, or will it be yet one more disappointment?? If he screws this one up again (which is a common thought down here where we are SO dependent on shallow gas) then he is a goner even before the election...

My 2 cents

 

[Pinner]

I don't think things will ever be the same, shale gas is now where it's at.

From what I've heard is the new royalty rates are about the same as B.C.

The oil companies are stealing the oil/gas here compared to the royalties they gladly pay in other countries... And they do alot of permanent damage especially in the tar sands.

 

[Bogger]

Quit questioning the government..... they know better than You and I......

Your just gonna make them mad...........

 

[Longhorn]

Quit questioning the government..... they know better than You and I......

Your just gonna make them mad...........

Silly me, what was I thinking??? Man I should know better, Steady Eddie has it all under control...

Man, I will sleep good tonight now that I have been reminded that the Gov knows what they are doing...

Now...If we could just educate the enviros (the ones that complain, but have never been in the field, on a well site, or pipeline) then we would be 'Golden'!

 

[Orrin]

I don't think things will ever be the same, shale gas is now where it's at.

From what I've heard is the new royalty rates are about the same as B.C.

The oil companies are stealing the oil/gas here compared to the royalties they gladly pay in other countries... And they do alot of permanent damage especially in the tar sands.

In most of the countries I worked in the royalties were similar or even less than what they pay here. The biggest difference is in capital expendetures, ease of regulations, less taxes and less personell costs. Even Egypt that rapes JV companies are easier on taxes, regulations etc. Plus if you don't like what you see you can pay to make things change. Point is the royalties are only a pecentage of the outlay producers have to pay to governments. One example is the cost's required to drill a sour well in Alberta are very high with all the public, environmental and regulatory requirements, in Pakistan and Egypt for example you just go drill the well and hope for the best. The ERCB and the National Energy board place huge hurdles for producers already and they just choose not to jump those hurdles to find a huge royalty hurdle as well. These hurdle make it safer for everybody but are a burdon nonetheless.

 

[buck50]

I don't think things will ever be the same, shale gas is now where it's at.

From what I've heard is the new royalty rates are about the same as B.C.

The oil companies are stealing the oil/gas here compared to the royalties they gladly pay in other countries... And they do alot of permanent damage especially in the tar sands.

how are they doing permanent damage in the tar sands????????????? the ground up there is saturated with oil, pretty much unuasble for anything! THOSE companies are removing that oil and putting back CLEAN dirt!!

 

[rigrat]

I don't think things will ever be the same, shale gas is now where it's at.

From what I've heard is the new royalty rates are about the same as B.C.

The oil companies are stealing the oil/gas here compared to the royalties they gladly pay in other countries... And they do alot of permanent damage especially in the tar sands.

I do agree that the oil sands are an environmental disaster after seeing it with my own eyes. Been in the oilpatch a long time and as far as conventional drilling goes, there is very little if any permanent damage to the environment. There is a reason why used drilling mud is now used to fertilize farmers fields and the amount of water used pales in comparison to what the farmers now use for irrigation. The oil companies are not stealing anything and take some big risks when it comes to drilling for natural resources. I personally think that people who think that the oil companies are all bad should go back to the horse and buggy.

 

[Bogger]

how are they doing permanent damage in the tar sands????????????? the ground up there is saturated with oil, pretty much unuasble for anything! THOSE companies are removing that oil and putting back CLEAN dirt!!

This has been my arguement for a long time.... I went from surveying the before (sticky, smelly, gross) to working in the plant (still sticky, smelly & gross) but I also toured the reclemation areas.... If anything the oil sands companies are cleaning up the environment....

 

[ZRrrr]

In most of the countries I worked in the royalties were similar or even less than what they pay here. The biggest difference is in capital expendetures, ease of regulations, less taxes and less personell costs. Even Egypt that rapes JV companies are easier on taxes, regulations etc. Plus if you don't like what you see you can pay to make things change. Point is the royalties are only a pecentage of the outlay producers have to pay to governments. One example is the cost's required to drill a sour well in Alberta are very high with all the public, environmental and regulatory requirements, in Pakistan and Egypt for example you just go drill the well and hope for the best. The ERCB and the National Energy board place huge hurdles for producers already and they just choose not to jump those hurdles to find a huge royalty hurdle as well. These hurdle make it safer for everybody but are a burdon nonetheless.

So how does Norway do it? They have a great royalty program and some serious, serious coin in their sustainability fund. Drilling hasn't changed there even with a high royalty rate.

 

[RMK Junky]

So how does Norway do it? This is what I stumbled across.

Norway, one of the world's richest economies, is a model of prudent economic management of resource wealth. So states the IMF 2000 Article IV consultation with Norway. Norway is the top non-OPEC oil exporter, the world's third-largest exporter of oil, and pumps about 3.2 million barrels per day. Norway's oil and gas industry underpins the economy, providing up to 25% of the country's gross domestic product. This country of nearly four and one half million people has a steady growth rate, almost no poverty, and negligible unemployment. Norway has a diverse economy based on agriculture, forestry, fishing and manufacturing, among other things, and its oil industry has developed amid much planning, bargaining, and public debate.

The most recent U.N. Human Development Report ranks Norway the number one place in the world to live, based on a cocktail of indicators about health, wealth and social outlook. Nearly 1% of GDP is spent each year to fight global poverty and enhance peace. Oslo often plays a mediating role in foreign conflicts, from efforts to reconcile North and South Korea to the now foundering Middle East peace process. Norway has created an economy that retained its progressive tax structure, re-invested its oil profits throughout the economy, and saved money to cushion future market shocks.

Norway struck oil in the North Sea in the 1960s. Norwegians' best defense against the decline of the industry that has made it the world's fourth-wealthiest country is the State Petroleum Fund which is managed by the national Norges Bank. Parliament created the oil fund in 1990, but the state had its first budget surplus only in 1995. Until then, oil income was used to pay down Norway's staggering foreign debt from the tough years before North Sea riches could be exploited. A substantial amount of the profits from the exploitation of a resource that is viewed as belonging to all Norwegians, not just the current generation, is invested in foreign stocks and bonds. The state-owned fund guards against spending too freely on public sector services in boom years so as not to lay off droves of state workers when the economy goes bust.

The Petroleum Fund is an instrument designed to prevent Norway's sub-stantial oil profits from being taken too rapidly into the economy. State bank officials and government leaders believe that dispersing oil revenues directly would overheat the Norwegian economy and suppress private sector growth. Their view is that the resource rent collected from the sale of their natural wealth of oil should be conserved.

Norway has extracted only about 30% of its known oil resources in the three decades and reserves are expected to last 40 more years. But the oil that's left is mostly in depths, distances and quantities that make its extraction less likely to produce profits of the magnitude to which the country has become accustomed.

From the perspective of some, Norway focuses more on how to administer and distribute the assets already acquired than on how new value is to be created. There are generous benefits for both men and women of eight weeks' vacation, liberal sick leave and day care that is reliable and inexpensive. Three-year maternity leaves, broad part-time opportunities and creative application of telecommuting help keep women in the work force. State assistance to single mothers is so generous that there is no need for a father's income.

Norway's State Petroleum Fund is now worth about $60 billion. Many of Norway's citizens fail to see why they should pay some of Europe's highest tax rates when Norway's crude output is worth about $7,000 a year for each citizen, about one fourth of per capita GDP of $28,433. If the $60 billion is invested for a rate of return of 10%, then each Norwegian citizen could receive $1333 as an annual CD. The state's priority instead is to conserve and build the Fund and funnel fund revenue into social benefits.

 

[Orrin]

So how does Norway do it? They have a great royalty program and some serious, serious coin in their sustainability fund. Drilling hasn't changed there even with a high royalty rate.

My first sentence said in the countries I worked in, I haven't worked in Norway I am part Norweigan though.

 

[Longhorn]

Well, I have read most of the review and the plan, its many, many pages of crap...

Look like Eddie can start packing his bags...the changes all look good, and it should be received with open arms by the industry in 2011, but it will do little if anything to fix the current mess that the industry is in RIGHT NOW...

You know, he really had a chance to get it right, and even though the numbers look decent, the timeframe sucks to salvage this year...

What a putz...

 

[ZRrrr]

The “Norwegian model”

In exchange for the right to drill, they must hand 78 per cent of their profit over to Mr. Slyngstad's fund, who is the man who looks after Norway's oil revenue.

An adjoining room contains computer desks staffed by his 11 traders, who invest the $1-billion in oil money his office receives every week. Norway's oil is drilled from beneath the North Sea by dozens of companies, including Norway's state-owned Statoil and Canadian firms such as Talisman and Petro-Canada. In exchange for the right to drill, they must hand 78 per cent of their profit over to Mr. Slyngstad's fund, which is carefully invested and is part of Norway's long-term savings account.

In the 17 years since it was launched it has become one of the four largest investment funds in the world. It currently holds $368.2-billion, or $78,351 for each Norwegian citizen. By the end of next year, even with an oil-price decline, it is projected to hold almost $500-billion, or $117,000 for each citizen.




They obviously told O snd G to put in their pipe and smoke it. Even a state owned oil company...what a concept!!! Yet our wonderful PC's have no backbnone and no interest in the people of Alberta.

 

[ZRrrr]

Check this out too:

Alaska Permanent Fund - Wikipedia, the free encyclopedia

Each qualified resident.

Hey Eddie....where's mine?

 

[Billy Boy]

This all started when Eddie shot his mouth off about a Royalty Review around the time of the leadership race. Will Eddie won and he he lived upto his word (against better judgement and sound advise) and started the ball rolling on the Royalty Review and here we are today with a dog's breakfast and Eddie and the Conservatives scrambling to save their political hides. They still have not gotten it right although the Industry seems to be alot a happier with the new formula but time will tell. It will be very interesting to see how things in the patch progress by this time next year. Stay tuned!!

Billy Boy

 

[Summiteer]

Eddy is an idiot (Ediot?) but to blame the government for the lack of activity in the patch is just dumb. Things slowed down everywhere. Oil companies working here are just taking advantage of a scared government without a spine, threatening to slow investment unless they get a better deal. Show me an actual oil company thats suffering. Lots of service outfits are but that's because the greedy ba$tards in Calgary are squeezing for more dough. I got nothing against an outfit making a profit, but when is enough enough?
But when it looks like the people are leaning towards the oil patch funded wildrose alliance, what do you expect?

 

[Pinner]

The new royalties have little to do with the slow down in activity.

Low oil/gas prices and the new developments in shale gas recovery are the reason for the slow down.