[drew]

Does anyone smell an opportunity tomorrow in the Canadian oil patch? All the talking heads are screaming bloody murder because of the plan unveiled by Stelmach today. I think the market will over react big time as shares are being discounted already in after hours trading. Hardest hit will be nat. gas and oilsands I do beleive, but I bet they all take a beating. Too bad I didn't sell my Nexen last week. Oh well, maybe tomorrow some CNQ or SU might catch my eye. Opinions anyone??

Drew

[auscanman]

The way I see it: why not raise royalties even higher. Even if oil companies only got to keep 10% of their profits there would still be plenty of incentive and enough money available for them to grow their operations.

Every drop of fossil fuel on this planet that is accessible and can be sold for more than it costs to extract will eventually be removed in any case. Why not slow down the frantic, environmentally destructive pace of extraction and have the profits that are being reaped actually benefit Albertans at the same time??

One final point... Alberta is one of the only places with oil in the world still open to private investment. So despite all the whining of the likes of Syncrude, where else are they going to go?

[Denny]

I see bad news for the oil sands players, in particular the newer ones. The background to the oil sands boom was the previous decison that the royalty rates were set at just 1% until the capital cost is paid. Now that can go as high as 9%. So, that will be rough.

But, my buddy in Alberta says that many Albertans wold actually prefer to see things cool off a bit, the social "infrastructure" build up can't keep up the with the investment boom. He actually said it woul be better to get more jobs five years down the road than more jobs now. Everybody seems to be working overtime.

I sense many Albertans feel they own the resource, but they are overlooking the investor interests outside Alberta, their partners in all this, and this may work against them down the road. Alberta has always been considered pro-business, but this will make Ed Stalmech look a bit like Hugo Chavez, with a different accent. And, perhaps it will make all Candians look to the world as some kind of a socialist nation and kill our future investment prospects. Because, the government getting involved financially in the business is for sure a socialist concept.

What I do not understand is just where Alberta will put that extra $1.4 billion a year in royalty payments. I understand their provincial government surplus last year was almost $6 billion, so they do not really need it. That is a lot for a population of just over 3 millon people. Maybe they can lend some of that spare cash to Ontario, at low interest rates.

[oilluber]

any experts care to comment on the confiscation of oil company assets by the Albertan Communists ?? The oil sands were supposed to contribute to world production growth.... but now the profitability of such projects has been squashed...

Where are we going to get future production growth from ?? Iraq and Iran ?? Should the US invade Alberta ??? Very dissappointed in the Commies up there. It seems that most countries are nationalizing their oil resources.

[auscanman]

Denny, just where are those 'investor interests outside Alberta' going to be diverting their money to? Vladimir Putin's Russia, corrupt Nigeria, volatile central Asia?!? Even with far higher royalties Canada would still be unmatched for providing a stable, predictable, highly favourable investment climate for oil and gas.

[cipi604]

Invade whoever you want, you go down no matter what!
BTW i live in that comunist country.

[auscanman]

The way I see it: why not raise royalties even higher. Even if oil companies only got to keep 10% of their profits there would still be plenty of incentive and enough money available for them to grow their operations.

Every drop of fossil fuel on this planet that is accessible and can be sold for more than it costs to extract will eventually be removed in any case. Why not slow down the frantic, environmentally destructive pace of extraction and have the profits that are being reaped actually benefit Albertans at the same time??

One final point... Alberta is one of the only places with oil in the world still open to private investment. So despite all the whining of the likes of Syncrude, where else are they going to go?

[oilluber]

$this->bbcode_second_pass_quote('cipi604', 'I')nvade whoever you want, you go down no matter what! BTW i live in that comunist country.

[cipi604]

Albertans decide, NOT USA.

[Blacksmith]

Kiss my Royal Albertian ass

[Blacksmith]

$this->bbcode_second_pass_quote('Denny', ' ')What I do not understand is just where Alberta will put that extra $1.4 billion a year in royalty payments. I understand their provincial government surplus last year was almost $6 billion, so they do not really need it. That is a lot for a population of just over 3 millon people. Maybe they can lend some of that spare cash to Ontario, at low interest rates.

[Chesire]

All countries are going to nationalize their energy systems sooner or later. You can remove a lot of management from the picture and companies can still run just fine. Its not the upper managment that does the grunt work . Its the rank and file and most of them don't care who signs the check as long as they can cash it. They will still show up for work. In some cases give a jaunty wave to the corpses twisting in the wind of the former management.

[pcoates]

The oil companies are generating a lot of righteous indignation from whole cloth. And are emitting a lot of bluster.

If they pull out or slow down in Alberta, were else are they going to go to get the oil they need to meet demand?

Sooner or later they are going to have to back down, and I very much suspect it is cheaper for them to back down sooner. If things slow down, it is more likely because of a lack of gas to process the oil sands than any posturing on royalties.

[americandream]

$this->bbcode_second_pass_quote('oilluber', 'a')ny experts care to comment on the confiscation of oil company assets by the Albertan Communists ?? --snip-- It seems that most countries are nationalizing their oil resources.

[nero]

Well the price of oil increased by 10% in a couple of weeks and Alberta has increased their royalty take by about the same. It sounds like the oil companies shouldn't be any worse off than they were a couple of weeks ago.

I also own oil sands but I'm not sure what they'll do tomorrow. This increase in royalties was well telegraphed before hand. It might already be priced into the stock price.

[strider3700]

Thats funny when I was in mcmurrey back in 2001 I think it was they told me they would make a profit at $30/barrel. Drop below that and they would shut down above that they would make money.

It's now $90/barrel so realistically they are making profit. Now if the government doesn't tax away that entire $60/barrel above the profit margin then they still make profit just not amazing amounts.

Realistically where are the oil companies going to go and find the oil if not in alberta? It's quickly becoming a take it or leave it type of deal where your only option is take it or get out of the oil business.

Besides the oil sands never really mattered. They will be around for decades keeping the ultra rich swimming in oil but they won't make a dent against depletion

[TheDude]

$this->bbcode_second_pass_quote('oilluber', 'a')ny experts care to comment on the confiscation of
oil company assets by the Albertan Communists ??

[oilluber]

hey guys, if the oil companies cannot make a decent profit,
they will suspend their operations / exploration.
They have a legal right to the leases they bought from Alberta,
unless the laws have been changed
so that the government can now reclaim all rights without any
refund to the oil companies.

There is alot of oil in IRaq, nigeria, and now alberta , where
the risk is high, profitability is low, and the oil will continue to
stay in the ground for generations.

Those of you thinking the oil companies will continue to operate where the return on investment is like 5% are nuts. Aint going to happen,
they will suspend operations and go elswhere.

[Chesire]

$this->bbcode_second_pass_quote('', 'T')hats funny when I was in mcmurrey back in 2001 I think it was they told me they would make a profit at $30/barrel. Drop below that and they would shut down above that they would make money.

[dave_ca]

Yeah, Alberta is defenatly as high risk as Iraq or Nigeria. Gotta watch those terrorist Newfies who fly in.