Left turn in Canada's oil-rich Alberta leaves investors reeling

Wed May 6, 2015 10:24am EDT
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By Scott Haggett and Nia Williams

CALGARY, Alberta May 6 (Reuters) - A seismic political shift in Canada's oil-producing heartland of Alberta has left voters, investors and oil executives braced for change as a rookie left-wing government promises major reforms after 44 years of Conservative rule.

The New Democratic Party (NDP) swept to crushing victory in the Western Canadian province on Tuesday on a pledge to review oversight of the oil and gas sector, capitalizing on voter anger over low oil prices, entitled politicians and government budget woes.

While polls had predicted the come-from-nowhere victory by the NDP under leader Rachel Notley, its election in a province where conservative governments have long partnered with industry leaders has left many reeling.

"The vast majority of energy executives and professionals we spoke with downplayed the polls, projecting instead that 'people would come to their senses' and return the (Progressive Conservatives) to government," said analyst Andrew Bradford of brokerage Raymond James.

"Even now our inboxes are filling with messages expressing something between disbelief and dismay."

The NDP is expected to be far less accommodative to the powerful energy industry and its oil sands operations in the northern Alberta, which have been the target of heavy environmental criticism. The oil sands are the largest source of U.S. oil imports.

Canada's main stock index fell sharply at the open on Wednesday with hefty losses among energy companies.

In her victory speech, however, Notley moved to assuage oil-industry worries, saying she will work "to build Canada's energy sector so we build bridges and we open markets instead of having a black eye".   Continued...