Premier Stelmach paid attention!
First it was Venezuela. Now, Nigeria is reviewing its relationships with international oil companies and the oil-rich Canadian province of Alberta is set to announce a decision Thursday on increasing royalties from the energy industry. It’s a move the industry warns could devastate Alberta’s oil patch.
At least once analyst compared Alberta to Venezuela last month after a government-appointed panel called for the province to boost its total take from the energy industry by 20 percent a year, or roughly $2 billion.
Under President Hugo Chavez, Venezuela raised royalty and tax rates on foreign oil companies, then later took majority control of all oil projects as part of a larger nationalization drive of “strategic” economic sectors. Chavez says those policies are ensuring that oil benefits Venezuelans instead of foreign corporations and governments.
Russia and Bolivia have also asserted greater state control over their oil or natural gas assets in recent years.
A report by Alberta’s provincial panel says royalties have not kept pace with world energy markets — a barrel of crude oil has reached record levels of more than $90 recently. It says all projects in the booming oil region should pay more because “Albertans do not receive their fair share from energy development.”
“There’s definitely been a trend over the last year or two, a lot of countries looking to nationalize oil reserves,” said Kyle Preston, an oil and gas analyst with Salman Partners. “It’s a function of higher commodities prices. Oil companies are making more money and governments want a bigger share.”
Quite a change from the tone under Ralph Klein, that. I guess I may soon have to take back every mean thing I ever said about Alberta.
Well, almost every mean thing. Except the ones I actually meant.
BTW, anyone else not buying the “this could backfire if they try it” meme? It didn’t exactly hold true in Venezuela. ConocoPhillips is now hurting because it picked up its ball and went home. It was the only oil company that did. Everyone else sucked it up and renegotiated their contracts. They’re still making money hand over fist.