Quote:
Originally Posted by Frequitude
The current structure for oil sands is already set up this way actually. Royalty rates fluctuate with the price of oil. Pre-payout they are 1%-9% of gross revenue (i.e. sales). Post-payout they are 25%-40% of net income (i.e. profit).
The oil sands structure is pretty great actually. It's a simple cash flow based system. It probably needs some tweaking though so that companies can't job the system to keep assets in pre-payout by doing things like "expansions" which are really just new projects.
What needs an overhaul is the royalty system for conventional oil and gas. I don't know it that well, but it's a complicated mess where your royalties depend on all sorts of things like quality, rates, types of wells and so on.
To be honest, I'm not scared much at all about what will be announced. I can't imagine they're going to actively kill anything. What sucks though is that it's taken this long to announce. Uncertainty keeps a non-zero amount of capital on the sidelines.
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I appreciate the response. Unfortunately the cash-based system has proven to have too many loopholes to be effective. The chances of a project ever making 'payout', given even the most inept of financial planning, is pretty close to zero. The review could be done quickly based on the existing system, and closing these loopholes would probably be enough to satiate both sides of the argument. (One side not happily, but perhaps honorably).
Agree entirely about the destructive nature of each delay.
Quote:
Originally Posted by DoubleK
Might suggest that you spend the effort to read the thread. Most of your questions have been answered 10 times over...
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I've read from my post on this morning, and the combination of political fervor, combined with some questionable economic theory (I really hope university economic courses have been updated since the 90s) are suffocating some really fantastic posts. It's exhausting.
I hope that this doesn't turn into another 'I hate teachers thread'.