These are challenging times in Alberta’s energy sector. The Alberta government’s decision in late October 2007 to move ahead with significant increases to royalties charged to oil and gas producers for conventional petroleum and oil sands production is already having a major impact on industry players.

The new royalty regime, which will see producers pay approximately an additional $1.4 billion per year of royalties by 2010, is being implemented in response to the Alberta Royalty Review Panel’s recommendations. The provincial independent panel had been appointed in February 2007 to ensure proceeds from energy resource development were being fairly distributed.

The increased royalties, combined with unprecedented movement in global energy prices and resource availability issues across all economic sectors, are challenging industry stakeholders to question their existing business models. The assumptions made years ago may no longer hold, now that the landscape has changed. Producers are looking for advice to help them determine where to invest, how to invest and how they must adapt to an increasingly fluid market environment.

Deloitte has used its long-standing experience in the energy sector to write Alberta’s royalty review: anticipating future change. It explains the rationale behind this complex change, as well as details of the change itself. More importantly, it helps stakeholders understand how they need to begin positioning themselves to navigate the changing environment in an optimal manner.

Stakeholders are increasingly seeking guidance to help make sense — and take advantage — of the large-scale changes that are affecting the energy sector. This report represents an ideal starting point.

Download Alberta’s royalty review - anticipating future change.

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