Canada: Oil Major Warns of $20-billion in Cuts

The backlash against increasing royalties in Alberta’s oil and gas sector continues. Canadian Natural Resources is warning that oil sands projects worth more than $20-billion could be shelved if proposals to increase royalties are fully adopted. It joins a chorus of dire warnings from the energy sector.
In the oil sands, Canadian Natural’s $7.6-billion Horizon mine is nearing completion and will continue, and phases two and three of the mine, which are already partly built, will also likely go ahead, the company said.
Among projects at risk that could cost more than $20-billion to develop are subsequent expansions of Horizon and plans to develop oil sands projects that use wells and inject steam to recover bitumen.
However, Canadian Natural said energy companies could pay more royalties at higher oil and natural gas prices, a concession several other major firms have also made. “There’s room for increased royalties. We’re saying that,” argues Canadian Natural president Steve Laut. “But it has to be at higher prices, and it has to be done in a way that makes sense, that’s fair for Alberta; fair in the sense it gets more royalties but also ensures that there is a vibrant oil and gas sector.”

So are the oil and gas companies scaremongering – or do they have a point?