Article content

Alberta Premier Rachel Notley unveiled her government’s new regime for collecting royalty payments from oil and gas companies on Friday, which was intended to modernize the province’s royalty structure for the shale era.

Oilsands companies will continue paying the Alberta government the same royalties they have paid for years, but the province’s take is changing for other unconventional oil and gas producers.

Get the full story here

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Alberta PM Rachel Notley ‘serious about encouraging investment’: What oilpatch insiders and energy analysts are saying about the royalty regime Back to video

Here’s some of the reaction from industry insiders and energy analysts on the new regime:

Tim McMillan, CAPP President:

“The grandfathering of existing projects, the fact that the new rules will only apply to projects starting in 2017, and maintaining the oilsands royalty regime, are signals that the government is serious about encouraging investment in Alberta at this difficult time.”

Mark Scholz, President of CAODC:

“Today’s report does not make significant changes to the overall royalty take by the province however it falls short of our recommendation to reduce rates in order to incent drilling activity and offset higher provincial taxes,” Scholz notes. “Furthermore, the recommendations do not address Alberta’s competitiveness gap with other Canadian oil and gas jurisdictions such as Saskatchewan and British Columbia.”

Michael Harvey, RBC Capital Markets:

“Overall, we would expect a moderate positive move in Alberta-focused stocks, largely by virtue of a perceived overhang being removed and a structure that does not appear to be much more punitive to producers. “

Brett Harris, Cenovus spokesperson:

“Based on our initial assessment of the review panel report, we anticipate minimal impact to Cenovus’s oilsands business. We will continue to review the significant changes proposed for conventional oil and gas royalties. However, due to the nature of Cenovus’s asset base, our preliminary view is that the recommended changes will not materially impact our conventional business either.”

Sneh Seetal, Suncor spokesperson:

“Specific to the oilsands royalty rate, maintaining the current oilsands regime provides certainty and predictability for investors who are making long-term decisions. Given the significant capital commitments required to develop the resource in Alberta, certainty is necessary. Companies in our industry have always accepted the need to pay royalties, taxes, and we are prepared to do so, but certainty about those payments is an important factor when making investment decisions.”