Friday, October 05, 2007

Alberta oil a major rip off - Big oil Accountant

Alberta royalties on the tar sands are the lowest in the world at 1% until costs are recovered. They are far less than the inflation rate in this province. Total increase over the past 5 years has been 36.3% or average over 7% per year higher than the rate for all Canada.

This is the paltry sum that Albertans are getting for the big black holes in the northern forest and tailings ponds that are growing around the exploitation that can be seen from space. That is what the province got for this resource for 40 years of production.

A post graduate aboriginal told me that those ponds overflow in a heavy rain and are already polluting the rivers. They are concerned about the long term effects on the environment. Sycrude is dishonest when they claim to have restored 30% of the damage.

Canadian Oil Sands Trust Unit, the largest owner of Syncrude, paid an effective income tax rate of under 5% for each of the last seven years according to the Financial Post Survey of firms.

The international president of Exxon Mobil, the operator through its 70% owned Imperial Oil, was the first to threaten Alberta over an increase in royalties. It is the world’s largest listed oil firm reporting profits over 18% of revenue after tax last year. Imperial it self had net income about 1% higher.

Exxon Mobil, Imperial Oil and Suncor are “private Canadians” as suggested in a recent article by Diane Frances in the National Post. They are public traded corporations. As the former head of Shell said as a member of the provincial commission, they can afford to pay more. Exxon Mobil agreed to give Newfoundland and Labrador a 5% interest in its offshore oil. That field took even more years to reach production than does a tar sands operation now.

Why are the Canadian governments giving this resource away so cheap?

Authored by former big oil accountant
I checked Imperial Oil earnings.That Exxon Mobil subsidiary alone earned $3 billionin Canada alone in the 12 months ended June 30.Like Former CEO of Shell said, they can afford it.

John Clark
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