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PostPosted: Fri Sep 28, 2007 7:47 pm
 


He'll get something, for sure. He has to now. But he won't get everything.


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PostPosted: Fri Sep 28, 2007 8:40 pm
 


Toro, some day's I wonder if in your will you will leave all your assets to the corporations. Seem's like you love them alot more than the government. :P


Anyways, we'll see about the whole royalties thing I'm sure. The more money the government can squeeze out of a country, as such the less going to foreign stock holders, the better. Keep the money made from our natural resources in our country.

If it was a fully or majority-owned Canadian company, I might be singing a different tune. But I've never liked the idea of foreign companies or foreign owned/controlled companies coming in and extracting our non-renewable resources. At least with renewable resources (hydro-electric power and timber) the money flow is potentially never-ending. But for limited resources like oil... no way. :(


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PostPosted: Fri Sep 28, 2007 9:26 pm
 


Toro wrote:
Oh yeah, investment banks are whores.

But that doesn't mean they're wrong.


The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


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PostPosted: Fri Sep 28, 2007 9:35 pm
 


Benoit wrote:
The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


By this do you mean that since they were happy with profits at $70/barrel, they should be satisfied with profits at $80/barrel and increased royalties? I can buy that, except the investment they are threatening to shift is future investment.

But as has been established, they won't settle for any less money. That's rational.


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PostPosted: Fri Sep 28, 2007 9:35 pm
 


Big oil comapnies can just ... [kissass]


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PostPosted: Fri Sep 28, 2007 9:58 pm
 


Canadian_Mind wrote:

If it was a fully or majority-owned Canadian company, I might be singing a different tune. But I've never liked the idea of foreign companies or foreign owned/controlled companies coming in and extracting our non-renewable resources. At least with renewable resources (hydro-electric power and timber) the money flow is potentially never-ending. But for limited resources like oil... no way. :(


hear about the income trust debacle?
it caused major Canadian trust funds to lose a tremendous amount of stock value, way more than they were valued at. Now they're getting swallowed up by foreign companies for cheap prices.

not saying what the government did was wrong, just saying. We're doing it to ourselves!


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PostPosted: Fri Sep 28, 2007 10:27 pm
 


neopundit wrote:
Benoit wrote:
The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


By this do you mean that since they were happy with profits at $70/barrel, they should be satisfied with profits at $80/barrel and increased royalties?


Yes.

neopundit wrote:
the investment they are threatening to shift is future investment.


The natural resources cannot be that different from the ones they were working on the day before the publication of the Report.


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PostPosted: Fri Sep 28, 2007 11:40 pm
 


Alberta may pay ultimate price

Oilsands developers unlikely to accept increase
Claudia Cattaneo, Financial Post
Published: Wednesday, September 19, 2007
CALGARY - A panel reviewing the province's royalties and tax collected from the energy sector has recommended the unthinkable -- what looks like a made-in-Alberta throwback to the disastrous National Energy Program.

While the context is different and the panel's report comes a quarter of a century later, like the NEP it promotes draconian measures that would vastly increase the government's take and grip on the booming sector, supposedly to ensure Albertans get a fairer share from their energy resources.

The reaction, if the panel's recommendations are adopted, would likely be the same: a flight of capital and the end of an era. Oilsands developers, already struggling with soaring costs, labour shortages and tougher greenhouse-gas legislation, are unlikely to just swallow a 17% increase -- to 64% from 49% -- in the amount they already hand over to governments. The report's key recommendation is that the 1% provincial royalty collected from oilsands projects before payout would remain unchanged, but the post-payout royalty would jump to 33%, from the current 25%.

It's no surprise that the industry had recommended a continuation of the status quo, not only because of its challenges, but because the government had already gotten it right.

The new terms can only result in projects being ratcheted down, postponed or even abandoned. Shareholders would rightly feel betrayed by a wholesale change in rules only a couple of years after the Alberta government was trumpeting around the world the benefits of investing in its politically secure, fiscally stable, plentiful oilsands deposits.




Grubby finger clicker here


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PostPosted: Sat Sep 29, 2007 12:05 am
 


Benoit wrote:
Toro wrote:
Oh yeah, investment banks are whores.

But that doesn't mean they're wrong.


The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


Its not unusual that jurisdictions attempt to re-negotiate deals once the price changes. That's fairly common actually.

However, the report recommends increased royalties on new investments, not on investments in the past. Simply because the price of oil rose in the past does not mean it will do so in the future. Nor does it mean that input costs will not continue to rise. Blithely assuming that IRRs will be the same over the next five years as it was the past five years is a good way for a CFO to lose his or her job.


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PostPosted: Sat Sep 29, 2007 12:06 am
 


Benoit wrote:
The natural resources cannot be that different from the ones they were working on the day before the publication of the Report.


But the economics of it can.


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PostPosted: Sat Sep 29, 2007 12:11 am
 


neopundit wrote:
Benoit wrote:
The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


By this do you mean that since they were happy with profits at $70/barrel, they should be satisfied with profits at $80/barrel and increased royalties? I can buy that, except the investment they are threatening to shift is future investment.

But as has been established, they won't settle for any less money. That's rational.


They'll settle for where the marginal revenue equals the marginal cost. The government is betting that the marginal revenue is very much higher than the marginal cost. That may be true now, but it may not be in the future. Even if it is only somewhat higher, if the government's actions are to shift the marginal cost curve above the marginal revenue curve, then marginal investment will stop.


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PostPosted: Sat Sep 29, 2007 9:03 am
 


Toro wrote:
Benoit wrote:
Toro wrote:
Oh yeah, investment banks are whores.

But that doesn't mean they're wrong.


The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


the report recommends increased royalties on new investments, not on investments in the past.


I have read the recommendations and the panel does not speak specifically of the new investments, it proposes to increase now the «post-Payout» net royalty rate from 25% to 33%.


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PostPosted: Sat Sep 29, 2007 9:22 am
 


Toro wrote:
neopundit wrote:
Benoit wrote:
The past proves them wrong: investments cannot be at risk since the increase in royalties just follows, with a big time lag, the increase in the price of oil. Investors received profits in the past, they were not desperately counting on increases in the price of oil.


By this do you mean that since they were happy with profits at $70/barrel, they should be satisfied with profits at $80/barrel and increased royalties? I can buy that, except the investment they are threatening to shift is future investment.

But as has been established, they won't settle for any less money. That's rational.


They'll settle for where the marginal revenue equals the marginal cost. The government is betting that the marginal revenue is very much higher than the marginal cost. That may be true now, but it may not be in the future. Even if it is only somewhat higher, if the government's actions are to shift the marginal cost curve above the marginal revenue curve, then marginal investment will stop.


Finding the point where the royalty rate generates the most public revenues should be the objective because, that way, equal economic freedom for each citizens can be maximized. In the process of finding the maximum (on the Laffer curve), it is better to miss the summit by imposing a royalty rate too high than too low. When the rate is too low, economic rents that fall in the hands of lobbyists are corrupting the political life worldwide. When the rate is too high, the resource is simply conserved.


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PostPosted: Sat Sep 29, 2007 10:29 am
 


I think the Alberta Government might be doing this just to cool its' growth a bit. There's a major shortage of Housing, Workers, and other Infrastructure that is getting to a critical stage.


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PostPosted: Sat Sep 29, 2007 10:44 am
 


Istanbul wrote:
Alberta may pay ultimate price

Oilsands developers unlikely to accept increase



This just in: Albertans unlikely to accept rising pump prices.

But we do. Not like they ask us, or we have a choice.

We aren't asking them to accept an increase in the royalty scheme ether. But they will. They are as addicted to their profits as we are to our cars.

'Steady Eddie' will hold tough, and do what he feels is right.


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