Royalty Report Sets Stage to Review Alberta’s Competitiveness: CAPP

Royalty Report Sets Stage to Review Alberta’s Competitiveness: CAPP


The Alberta royalty review has led to a balanced report that sets the stage for more work between industry and government to ensure Alberta’s oil and gas sector is competitive in North America to attract investment and create more jobs and value for Albertans, the Canadian Association of Petroleum Producers (CAPP) said (January 29th).

“The new royalty framework is principle-based and provides a foundation to build the predictability industry needs for future investment,” said Tim McMillan, CAPP’s president and chief executive officer.

“The report recognizes royalties are just one part of the competitiveness equation for Alberta. With today’s economic situation, now is the time for industry and the Alberta government to work together on solutions that will make Alberta a world-class province to do business.”

“Today’s announcement has been the result of a fair and credible process, one Albertans can trust,” McMillan said.

The royalty panel produced a detailed, 200-page report over its five-month review.

“We will take the time to review the report thoroughly to assess its full impact on our industry,” McMillan said.

CAPP will continue to work with government during its 60-day calibration period to finalize details of the royalty framework.

“We will be engaging government to understand further the implementation phase and proposed value-added programs, two areas where we have some initial questions,” McMillan said.

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

CAPP’s submission recommended a royalty framework that is stable, predictable and competitive; encourages investments to develop more oil and gas; supports research and development to reduce environmental impacts further; and allows industry to reach more customers in more markets.

“We would like to compliment the royalty panel for completing its work in a timely and transparent manner that was open to input from all Albertans, including our industry,” McMillan said.

CAPP will seek to work with the Government of Alberta to develop a strategy that ensures the province’s oil and gas sector is competitive. Such a strategy should focus on what industry and government can do in the short term, as well as a longer-term plan that examines the province’s cost structure in light of current and future policies, and what industry can do to improve productivity and efficiencies through technological innovation.

“We are prepared to roll up our sleeves and work with the Government of Alberta,” McMillan said. “I believe we both share the same desire to make Alberta’s oil and gas industry competitive now and for the long-term – to create value and benefits for all Albertans.”

The Canadian Association of Petroleum Producers (CAPP) represents companies, large and small, that explore for, develop and produce natural gas and crude oil throughout Canada. CAPP’s member companies produce about 90 per cent of Canada’s natural gas and crude oil. CAPP’s associate members provide a wide range of services that support the upstream crude oil and natural gas industry. Together CAPP’s members and associate members are an important part of a national industry with revenues from oil and natural gas production of about $120 billion a year. CAPP’s mission, on behalf of the Canadian upstream oil and gas industry, is to advocate for and enable economic competitiveness and safe, environmentally and socially responsible performance.