Selling Albertans short

Rent This report will begin with a general discussion of the problems with is the value at the point of sale less all prior costs incurred, including a the way in which the royalties review was structured and fl aws in the suitable return on investment. [...] The Panel deemed such issues to be outside of their mandate, even though much of the public input they received related to the need for a slow down in the pace of development. [...] Recommendations within the Report that Fall Short 1% royalty holiday for the tarsands One of the most fl awed recommendations in the Panel’s report is that no changes be made to the practice of charging only the base royalty rate of 1 % of gross revenues until a project’s capital expenses have been paid off. [...] For example, in Bolivia 82% of all revenues from natural gas go to the government; in Kazakhstan 80% of oil extracted goes to the government in a production sharing agreement; in Abu Dhabi and the United Arab Emirates, the profi t margin for companies is limited to $1 per barrel; and in Russia the government takes 90% of the value of sales above $25/barrel.27 In light of the 1% royalty holiday per [...] It is this type of structure that Parkland has recommended in previous reports and recommends the Alberta government implement immediately.28 Incremental royalty - windfall price capture Other jurisdictions recognize that increased oil prices are not the result of anything the industry has done to add value, but rather a refl ection of the increased value of the resource itself.