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Global investment | PLANT West

Alberta is third, but Saskatchewan has the best policies.


Saskatchewan has the best policies in Canada for attracting oil and gas investment but the Fraser Institute’s annual Global Petroleum Survey shows Alberta continues to lead with proven reserves and is number three in the world.

The survey uses the opinions of 864 petroleum executives and managers to rank jurisdictions for their relative attractiveness for investment and segments jurisdictions into tiers based on proven oil and gas reserves.

Texas is the top spot for investment globally with the largest proven reserves (92.1%). Qatar ranks second.

Among the second tier of jurisdictions, Oklahoma has 6.8% of total proven reserves, followed by Arkansas then North Dakota.

The third tier representing just 1.1% was topped by Mississippi, followed by Saskatchewan, Kansas, Alabama, Manitoba and The Netherlands/North Sea.

Looking strictly at survey responses without accounting for proven reserves, Saskatchewan is first in Canada and third out of 157 jurisdictions worldwide. Manitoba is second and ninth, followed by Alberta in 19th place.

Political uncertainty in BC, particularly around proposals for two pipelines carrying oil from Alberta to the BC coast for export, was a negative for Alberta although geological and technological know-how was a positive.

Newfoundland and Labrador ranked 24th compared with 47th one year ago thanks to improved scores for labour regulations and employment agreements.

Pursuing LNG
BC, which is pursuing export opportunities for liquefied natural gas (LNG), dropped from 39th (of 147) in 2012 to 47th because of uncertainty concerning environmental regulations, political stability, taxation in general and the province’s carbon tax in particular.

The Northwest Territories was 61st and New Brunswick 81st, a move up from 102nd last year that is attributed to improved performance on regulatory enforcement.

At the other end of the scale, the survey shows Quebec falling from 101st last year to 141st this year and stands out as the Canadian jurisdiction with the greatest barriers to investment, ranking in a grouping that includes Syria and Libya.

Quebec’s poor results are attributed to the cost of regulatory compliance, taxation in general, uncertainty concerning protected areas and policies discouraging investment in hydraulic fracturing.

Most respondents (62%) indicated that their assessment of Western Canada and the Northwest Territories as investment venues would deteriorate if pipeline bottlenecks continue to constrain movement of oil to Eastern Canada, export markets overseas and US refiners. One respondent described midstream or pipeline constraints as “the biggest risk to the industry today in Western Canada.”

The exploration and development budgets of participating companies account for more than 50% of the $619 billion spent in 2012 on petroleum exploration and production among international oil companies.

Visit www.fraserinstitute.org for a copy of the report.

This article appears in the Nov./Dec. 2013 issue of PLANT West.