Quote:
Originally Posted by Nehkara
Doesn't that just make sense? It protects the oil industry during difficult times and allows the province to get value for its resources when oil prices are high.
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Ideally yes, but unfortunately that is not how it will play out. With the uncertainty of a sliding scale private and institutional investors will shy away from funding the small guy who wants to start/continue running an E&P. There will be way too many what if scenarios for these guys and a provincial risk factor which will probably make non-Oil investments seem more lucrative. Further, this royalty regime will add more favor for exploiting hydrocarbons in the already favored Saskatchewan. Something I find amusing, since SK is already favored heavily for heavy oil and thermal projects because of AER regulations.
For the majors, similarly they will shift focus away from Alberta, why would they focus their energy here when the return in SK or elsewhere will net a greater return?