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Alaska well-placed in global survey
As reported in last week’s issue of Petroleum News, Alaska trails Wyoming and Colorado among U.S. states, but edges out all Canadian provinces except Saskatchewan in a study of investment “friendliness” among global oil and gas jurisdictions compiled by the Fraser Institute, an independent Canadian research organization.
An All-inclusive Composite Index placed Alaska 14th “best” among 54 jurisdictions in a field led by Colorado, followed by Thailand, Qatar, Romania and the United Kingdom (see story on Alaska’s placement in study in Dec. 16 issue of Petroleum News).
Saskatchewan was 13th, Texas 21st, Alberta 22nd, British Columbia 26th, the Northwest Territories 34th, Nova Scotia 35th, Newfoundland and Labrador 45th and Montana 47th.
Of the U.S. states, Wyoming was 10th, Texas 21st, Oklahoma 23rd, California 24th, Louisiana 27th and Montana 47th.
The “worst,” in descending order, were Bolivia, Venezuela, Ecuador, Iran, Russia, Argentina and Cuba.
The standings were compiled from a blending of responses from 375 worldwide companies, whose E&P budgets last year totaled US$85 billion, or 31 percent of global expenditures.
The respondents were given options to measure the various jurisdictions, such as “encourages investment,” is a “strong deterrent to investment” and “would not invest.”
The survey weighed a number of factors ranging from royalties, taxation and regulations, labor availability, political stability, environmental regulations and the business climate.
Of those deemed to have the most favorable regulatory climate, the Northwest Territories and Colorado shared top spot with Peru, Qatar, Romania and Thailand. Saskatchewan was 14th, Oklahoma 15th, Alaska 19th, Alberta 26th and British Columbia 32nd.
Of the E&P companies surveyed, their 2006 budgets were apportioned at 35.91 percent for conventional crude, 10.32 percent for unconventional sources (such as oil sands and oil shales), 33.93 percent for conventional natural gas, 11.31 percent for unconventional gas (such as coalbed methane) and 8.53 for “other.”
Survey before Alberta royalty review The survey was conducted before the results of Alberta’s royalty review were known.
To that end Gerry Angevine, the Fraser Institute’s senior economist at its Center for Energy Policy, said he was surprised Alberta did not perform better than Saskatchewan.
“If Alberta didn’t do that well now, what will be the case next year?” he asked.
Saskatchewan’s newly appointed Energy Minister Bill Boyd said his province was encouraged by the results and would do its best to maintain the rating.
He said the province has no intention of raising royalties and undoing the “tremendous advantages” it now enjoys.
Currently Saskatchewan pumps 425,000 barrels per day of conventional crude, putting it second in Canada behind Alberta’s 540,000 bpd, although Alberta climbs to 1.9 million bpd after oil sands output is rolled in.
The study noted that even if Saskatchewan’s tax policies were less favorable than Alberta’s, it emerged on top in Canada once labor availability and the low cost of regulatory compliance were taken into account.
—Gary Park
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