OTTAWA Aug 27, 2007 (Dow Jones)
Alberta's Finance Minister Lyle Oberg said Friday he won't receive the long-awaited oil and gas royalty review until Sept. 14, but expects to decide whether to change the existing regime by the end of the month, the Globe and Mail reported Saturday.
The review, which kicked off earlier in February to look at whether Alberta is getting a fair return on its vast natural resources, was previously expected to be completed by the end of August.
Oberg said his decision on the royalty scheme will likely be released one or two weeks after he receives the report, the report said.
Alberta's existing regime is a combination of upfront lease bids, production royalties and corporate income taxes, established to kickstart oil sands production when global crude prices were around $20 a barrel, or around a third of current prices. Operators currently pay 1% of gross revenues until capital costs and a return allowance are recovered, after which the rate jumps to 25%.
The minister has asked to see the details of the tentative deal Newfoundland and Labrador has struck with the consortium behind the Hebron offshore oil field, the report said, which gives the province a 4.9% equity stake in the C$6 billion project. Oberg added, however, that Alberta has no plans to seek a similar equity stake in future oil and gas developments, according to the Globe.
Last week, the Chevron Corp.-led (CVX) Hebron project was officially restarted after a 16 month hiatus, with the consortium agreeing to a "super-royalty" regime linked to rising oil prices as well as the province's equity stake.
Copyright (c) 2007 Dow Jones & Company, Inc.
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