Canadian Royalty Trusts...more bad news from the politicians...I have some HTE also and not sure what to do now as I see my profits slowly dwindling away!
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TAKEN OFF THE HTE Message board at Yahoo today......
Lisa Schmidt, Calgary Herald
Published: Wednesday, September 19, 2007
Alberta's oilpatch was dealt a blow Tuesday after a government-appointed panel recommended raising royalty rates across the board.
"It's way bigger than we thought -- it is a wholesale change to the entire royalty system," said Greg Stringham, vice-president with the Canadian Association of Petroleum Producers.
"It's creating a new department, a super ministry, revaluing the bitumen, revaluing the products. This is not just changes to royalties and tax rates."
Royalty review panel chairman Bill Hunter leaves a press conference held at the legislature Tuesday.
Rick MacWilliam, Edmonton Journal
Oil and gas officials were poring over the report released late Tuesday and presented to the provincial government, which is expected to provide a response to the recommendations by mid-October.
But the initial reaction was widespread disappointment over the panel's conclusion that royalty rates must immediately rise to ensure Albertans are receiving their fair share from energy development -- potentially another $2 billion annually at current prices.
"It's going to be interesting what the big investors do because capital always goes where the highest return on the money is," said Heather Douglas, president of the Calgary Chamber of Commerce.
"The oilsands are one of three great basins in the world -- the others are Middle East and Russia -- certainly Alberta offers the global investment community a very stable place to do business, but changes in rules and regulations and reporting and all of those sorts of things will cause instability until people understand the ramifications or what the government is going to do."
The biggest revamp would be on oilsands royalties, raising payout rates to 33 per cent from 25 per cent, while leaving the initial one per cent rate intact until a project recovers its capital costs. The changes would also apply to both new and existing projects and the panel also suggested a review of current agreements with Suncor and Syncrude.
"Recognizing the high cost of oilsands development that's good, but 33 per cent, that's a big jump," said Brad Anderson, executive director of the Alberta Chamber of Resources.
The report also advocates an immediate "severance" tax on oilsands production that would kick in when oil prices reached $40 a barrel and increased with prices. It also pitches a five per cent royalty credit to companies who build new upgrading capacity within the province.
"Now's the time for government and industry and knowledgeable stakeholders to get together and work on this like we did back in 1996," Anderson said. "We need a National Oilsands Task Force Part Two to look at this data and to crunch the numbers."
Bill Hunter, chairman of the panel, acknowledged the higher royalties and taxes will slow the pace of oilsands investment, but dismissed suggestions the changes would hurt the industry.
"Not at all -- we stand by our report," he said Tuesday after the recommendations were released in Edmonton.
It "still keeps us in a very, very good competitive position worldwide," he added.
The report also said the province should move to simplify the current system for conventional oil and gas rates, which would result in lower royalties for the majority of lower-producing wells.
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