Saturday, October 20, 2007

Alberta Oil Royalty Sell Out

Looks like we will not be getting any real news about Farmer Ed's plans around oil royalties when he does his Ed TV program next week.

Alberta royalty details now expected by month end


Instead he spent this week spinning why he is not going to get tough on Big Oil, preparing us for lowered expectations regarding his royalty review.
Stelmach touts benefits of existing royalties


Having met with the oil boys in private and having his Energy Minister do the same they knew this was coming down the pike.

Royalty proposal 'overly aggressive': Panel member

A key member of the panel that recommended controversial increases to oil and gas royalties in Alberta has distanced herself from its conclusions, calling them "overly aggressive" and "dumb" in some cases.

Judith Dwarkin, chief economist at Ross Smith Energy Group Ltd., a top Calgary-based independent energy research firm, co-wrote a new report that criticizes the panel for lacking the "requisite industry expertise and time" to adequately make certain recommendations, resulting in flawed conclusions.

Ms. Dwarkin, who holds a doctorate in economics and at one time was responsible for evaluating Alberta's oil-and-gas royalty system for the Department of Energy, was seen as the most credible member of her six-person panel because of her extensive experience.

A report we have never seen because the Minister has kept it secret. She was the governments Big Oil ringer on the committee so this should come as no surprise.

So what could we hear from Farmer Ed when it comes to royalties. Well not 20%, not 10% nope. Wait for it.....

Making the rounds in Calgary's financial community yesterday was speculation that the province has arrived at a decision to boost royalties on oilsands projects - but not as much as is currently discounted in stock prices.

The scenario - under which royalties would increase to 5% from 1% before project payout, and to 30% from 25% after investment is recovered, and also involves the scrapping of a proposal for a new super royalty - was seen as positive for Canadian oilsands players, whose stocks rallied as oil was rocketing higher.

Meanwhile despite all the doom and gloom being raised over the royalty report it has had little real impact on the industry.

Here is the stock chart for the year for one the oilsands giant; Suncor. And despite a blip in September, after the royalty review announcement the shares just keep going up, and up, and up....In fact they are doing better than they were last spring prior to the Royalty Review report.

Canadian stocks rally, led by energy and mining
Suncor Energy closes at all-time high







And as usual it had less to do with royalties than the oil and gas market.

Oil Slips

Crude oil fell 0.8 percent to $88.77 a barrel on speculation that U.S. supplies are sufficient to meet demand, after rising above $90 in New York for the first time,

EnCana Corp., the nation's largest natural-gas producer, fell C$2.60, or 4 percent, to C$62.85. Smaller rival Canadian Natural Resources Ltd. retreated C$2.96 to C$74.83. Suncor Energy, the world's second-largest oil-sands miner, dropped C$2.44 from a record to C$100.96.

A measure of energy shares, after gaining 4.1 percent this week before today as oil touched daily records, retreated 2.7 percent today. It helped the S&P/TSX climb 11 percent this year before today. Seven of the benchmark's 10 subgroups fell more than 2 percent today.


Don't Let Big Oil Set Our Royalty Rates make sure Ed hears from you


SEE:

Headline Says It All

Ohhh Pulllleeeaasse

Alberta Needs A Chavez

Albertans Are Simpletons Says Government

Royalty Is NOT A Tax

Fearless Prediction Confirmed

Morons

More Shills For Big Oil

Stelmach Sells Out

King Ralph Shills For Big Oil



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4 comments:

Werner said...

I just saw a little snippet on CTV about that demo by the oil workers who were PAID to show up. Yessirree, some REAL individualists those guys (and girls)!!! Of course, there were the usual obscene gestures towards the left wing counter-demonstrators. Did you make it there? I'll probably lose my ISO-9001 rating in class struggle and high definition chug-a-lugging but I'm beginning to feel Joe worker can be just as much of an asshole as most business people ... especially around payday.

EUGENE PLAWIUK said...

No I didn't make the counter demo, but I did my best emailing and posting calling for one. Some of us work so showing up at 11 AM well that ain't gonna happen. Unlike those guys paid and bused to be there.

Unknown said...

If the federal government has suggested this alberta would be talking succession.
I am confused about why you are using the stock chart of SU as a basis for your argument. You believe you are entitled to the upside of ownership but are not prepared to take on the risk of ownership (owning the stock). Suncor is the best performing Alberta land based stock year to date. Why don't you look at the Junior and Intermediate gas companies, they are off on average 30 to 40% year to date. They are barely economical and with a 20% royalty increase they will disappear. As will most of the service companies. If you are old enough and knew alberta post the feds imposition of the NEP get ready for the re-run.

sam said...

An oil is a substance that is in a viscous liquid state ("oily") at ambient temperatures or slightly warmer, and is both hydrophobic (immiscible with water) and lipophilic (miscible with other oils, literally).
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Sam
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