uwish uwish:
DrCaleb DrCaleb:
People are attributing oil sands investment 'leaving' to the royalty review, when there has been no causal relationship shown. I haven't seen any reports that any investment has left, other than projects getting delayed because low oil prices mean they aren't viable. Same with drilling rigs. But lack of investment is not the same as a company pulling up stakes and leaving.
And having a royalty review on occasion is a prudent move.
http://business.financialpost.com/news/ ... rs-nervoushave a little look at this
http://www.advisor.ca/investments/marke ... rta-189361It shows data from the last royalty review(s) and how it impacted investment in Alberta's energy sector. Do you really think this time is any different? That was $60 oil and as soon as steady eddy said royalty review massive capital was walked out of AB to our neighbours.
It happens EVERY time someone even hints at royalty review. I am not saying we should never do them ever, however; I work first hand in a industry that shelved projects for a year NOT BECAUSE OF OIL PRICE, but because of the words Royalty Review.
You see heavy oil is a fickle industry, we can't just shut in wells, our projects take 10 years to plan out and we have to build significant infrastructure, that happens when oil is low or high because the outlook on first steam on some of these initiatives is 15 years away.
I get that heavy oil is different than the traditional oil industry we had in Lougheed's day, but there needs to be some periodic review of royalties to make sure everyone is adequately compensated, not just shareholders of oil companies.
And while industry was spooked by an NDP politician calling for a review or royalties, they should have had some faith in the panel she put together, which was non-partisan and pretty well-informed.
The 'panic' if there ever was one, was totally unnecessary and unwarranted, as the review bore out.
CKA Uber 
