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Manitoba is fifth globally for petro-investment: Fraser Institute

Global oil execs pick Oklahoma as best place to spend their money.


June 26, 2012
by PLANT STAFF

CALGARY: Manitoba has cracked the top 10 best places for oil and gas investment, according to petroleum executives and managers who participated in a Fraser Institute global survey, but Canada’s energy producing provinces are behind several locations in the US.

The public policy think-tank with offices across Canada ranked Oklahoma first globally, and Manitoba fifth, but the province is first in Canada with Saskatchewan slipping to second after ranking at the top in 2011. Alberta moved up to third from sixth place in the Global Petroleum Survey 2012, which polled 623 respondents representing 529 companies.

Manitoba’s improved scores on questions pertaining to taxation in general, the cost of regulatory compliance, and uncertainty over environmental regulation propelled the province to the top of the Canadian rankings.

Globally, Manitoba ranked fifth out of 147 jurisdictions included in the survey, up from 12th (of 135) in 2011, while Saskatchewan fell to 13th from 11th.

Alberta vaulted to 21st from 51st overall, mainly because of improved scores on questions pertaining to the regulatory climate. This suggests that respondents approve of the plan government announced in May 2011 to simplify regulatory processes and procedures with respect to oil and gas drilling permits, project development, and site remediation.

“Two years ago, Alberta ranked 60th in the world for oil and gas investment, the result of what the industry saw as an unexpected royalty grab by the provincial government. Today, investors say they are less concerned about regulatory uncertainty, the cost of regulatory compliance, and regulatory duplication and inconsistency,” said Gerry Angevine, Fraser Institute senior economist in the Global Resource Centre and co-author of the survey.

BC was ranked the fifth most-attractive Canadian jurisdiction, up from eighth in 2011, while Newfoundland and Labrador dropped to sixth from fifth. The Yukon, which was not ranked last year, finished seventh, the Northwest Territories rose to eighth from 10th, and Quebec’s ranking was static at ninth.

New Brunswick tumbled to 10th place from seventh to become the worst-ranked province in this year’s survey. New Brunswick’s poor showing is related to the manner in which regulations governing exploration and development of shale gas resources are being administered and uncertainty over the environmental regulations that will apply to a shale gas industry.

“To top it off, concerns over anti-development activism in New Brunswick have increased since a company pursuing shale gas activities was vandalized last summer,” Angevine said.

Canadian jurisdictions mostly fared well in the international rankings of 147 jurisdictions. Aside from Manitoba, Saskatchewan, and Alberta, Nova Scotia ranked 35th (down from 34th), BC 39th (up from 69th), Newfoundland and Labrador 47th (up from 50th), the Yukon 58th (not ranked last year), and the Northwest Territories 60th (up from 103rd). But Quebec at 101st (down from 92nd) and New Brunswick at 102nd (down from 59th) appear relatively unattractive for investment compared to the rest of Canada and a large majority of jurisdictions worldwide.

The Fraser Institute says their poor performance appears to reflect the manner in which policies in relation to potential shale gas development are being handled.

Globally, the top 10 most attractive jurisdictions in this year’s survey are: Oklahoma, Mississippi, Texas, North Dakota, Manitoba, Netherlands, New Mexico, Kansas, Denmark, and West Virginia.

The 10 least attractive jurisdictions are: Bolivia, Venezuela, Iran, Russia-Eastern Siberia, Libya, Ecuador, Uzbekistan, Argentina-Santa Cruz, Iraq, and Russia-other.

Click here to download the survey results.