Alberta says oil, gas royalty review to be done by year-end

Fri Jun 26, 2015 3:56pm EDT
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By Nia Williams and Scott Haggett

CALGARY, Alberta (Reuters) - A review of royalties paid by Alberta's oil and gas industry will be finished by year-end, the government of Canada's largest oil-producing province said Friday, making good on an election promise to reassess how fairly resource revenues are divided up.

Environment Minister Margaret McCuaig-Boyd said Dave Mowat, chief executive of provincially owned financial services agency ATB Financial, will lead the review.

The left-leaning New Democratic Party (NDP) government's pledge to review royalties has unsettled many energy companies, which have warned uncertainty about higher costs could lead to capital flight and stall project development.

Alberta, home to Canada's vast oil sands and the largest source of U.S. crude imports, is already reeling from a global crude price slump that pushed companies to slash capital spending and lay off thousands of workers.

McCuaig-Boyd said any changes to royalties would only come after consultation with all Albertans, and that the government will consider the review panel's recommendations but not be bound by them.

Producers have been keen for clarity on the review and Friday's announcement sets out a timetable.

"They (industry) don't want us to lag too long because they want to have a sense of stability moving forward and what the whole picture is going to look like," McCuaig-Boyd said.

The terms for the royalty review have not yet been set, but Mowat said he would begin by recruiting additional panel members.   Continued...