I must comment on this-- This corporation is the one that is trying to re-shape human rights, migrant and labour rights law and is leading the way in getting the flood gates opened for massive amounts of "temporary foreign worker" programs. They have been operating in their "Horizon Oilsands Project" with 500 no-rights, no papers labourers. These workers are the ultimate in cost saving, and CNRL, apparently while making people "learn while they go on the job", have killed 2 in accidents and wounded four others, all from China. If this doesn't save them enough money, then nothing will. I would imagine, based on the speed of their attempts to grow into a full-fledged operator in the tar pits (they are already the size of a major city), they are the company that can afford the MOST increases in royalty rates-- seeing as they save so much on minimum wages, workers safety, training, workers transport to and from (their "temporary workers" are not allowed to leave the site), and of course, they save completely on land reclamation (as do all the corporations, though Syncrude puts on the best fake show).
Don't weep for them, they don't care about you. Plus, it's called "peak oil"-- they aren't going anywhere.
--M
Canadian Natural may rethink oil projects
Tue Oct 9, 2007 5:51 PM EDT148
By Jeffrey Jones
CALGARY, Alberta (Reuters) - Canadian Natural Resources Ltd may shelve C$7 billion ($7.1 billion) of heavy oil and oil sands projects if Alberta charges higher royalties and taxes as recommended by a review panel, it said Tuesday.
But Canada's No. 2 independent producer said it could be open to some increases when oil and gas prices surge, allowing for what the company considers a healthy rate of return.
Canadian Natural (CNQ.TO: Quote) picked up where many of its industry peers left off last week: warning of spending cuts if Alberta Premier Ed Stelmach adopts the panel's recommendations and boosts royalties by 20 percent, or C$2 billion, a year.
Canadian Natural President Steve Laut took issue with a proposed oil sands severance tax, applied when projects start producing. It does not recognize high initial capital costs of development, he said.
"The severance tax actually puts these projects under the water, and it doesn't take very much when you take it up front. That's a lot of investment and a lot of employment and that's the message we're trying to send here," Laut told Reuters.
"There is a way to increase the government's share of royalties at higher prices, but also keep a vibrant oil and gas sector, which employs a lot of people and drives the economy."
Canadian Natural, the largest of oil, industrial and sports concerns that count Calgary financier Murray Edwards as a major investor, also warned of a big cut in natural gas drilling.
It is developing the C$7.6 billion first phase of its Horizon oil sands project, which is slated to start producing synthetic crude oil next year.
It said it would likely scrap Horizon phases beyond the second and third if the royalty recommendations are adopted.
The panel has also urged an increase in the royalty rate -- to 33 percent from 25 percent -- that companies must pay when the money their oil sands projects generate reaches the level of their development costs.
Canadian Natural said other projects that would eventually produce 235,000 barrels a day, including the steam-driven Kirby, Birch Mountain and Gregoire Lake heavy oil developments, would not go ahead. Their total cost estimate is C$7 billion.
If Canadian Natural makes all the cuts mentioned, its net asset value could drop by a fifth, Desjardins Securities analyst Adam Zive said.
It has operations around the world, but 70 percent of Canadian Natural's oil and gas production is in Alberta, giving it the largest exposure among big domestic firms, Zive said.
Its shares fell C$1.06, or more than 1 percent, to C$72.73 on the Toronto Stock Exchange on Tuesday.
Like other companies, including EnCana Corp (ECA.TO: Quote) and Talisman Energy Inc (TLM.TO: Quote), Canadian Natural said it believed the six-member panel based its report on flawed information that underestimated the costs of operating in Western Canada.
The panel has said it gleaned most of its information from the industry's own data. Its members have said its measures would maintain Alberta's position as a good place to invest.
In corporate presentations, Canadian Natural executives have said Horizon will generate a "wall of cash flow" to fund investments in Canada, the North Sea and West Africa.
Laut said the description did not necessarily conflict with warnings that its spending in Alberta will drop.
"There's probably C$2 billion of pre-investment, so it's C$9 billion before you get one drop from that wall of cash flow," he said. "What that panel's proposals have done here is eroded the ability to get your returns on capital."
Stelmach, now facing intensive lobbying from oil firms and investors, is expected to respond to the report this month.
Opinion polls have shown the public overwhelmingly believes the industry is not paying its fair share in royalties.
(Additional reporting by John McCrank and Scott Anderson)
($1=$0.99 Canadian)
http://ca.today.reuters.com/news/newsArticle.aspx?type=businessNews&stor...
