Newspaper article The Canadian Press

Royalty Review: How Alberta Calculates Its Oil and Gas Royalty Take Today

Newspaper article The Canadian Press

Royalty Review: How Alberta Calculates Its Oil and Gas Royalty Take Today

Article excerpt

A look at Alberta's current royalty regime

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CALGARY - Alberta's current oil and gas royalty system, which has been in place since 2011, is complex. There are different formulas for oilsands, natural gas and conventional oil that take into account production rates and commodity prices.

Here is a breakdown of how the province's royalty regime works today:

Oilsands:

-- In a project's early stages, the rate is between one and nine per cent of gross revenue, depending on oil prices. Once a project reaches "payout" -- covered upfront costs and earned a certain rate of return -- companies pay whichever is higher: one to nine per cent of a project's gross revenue or 25 to 40 per cent of net revenue (gross revenue minus certain costs).

Oil outside the oilsands, also known as "conventional" oil:

-- The rates range from zero to 40 per cent of a well's gross revenue, depending on production rates and the price of oil. …

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