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GroupSadanand KMagdaleneAkshay AgShadab AkPranit Naik
CANADA
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OVERVIEW
OIL
Production (2011)-3.592 mbbl/day of production (6th), 1.355 mbbl/da
Reserves (3rd)- 180 billion barrels (171 bbl. of bitumen in oil sands)
Consumption- 1.6 million barrels per day
Prices- $94.21 (US$/bbl.)
1.7 -2.5 tbl of probable/possible oil sands reserves
NATURAL GAS Production- 13.7 billion cubic feet per day
Reserves- 70.4 trillion cubic feet
Consumption- 7.9 billion cubic feet per day
Prices- 2012 - $2.85/mmbtu
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3rd largest NG producer- 700-1,300 tcf for100+ years
6th largest crude oil producer- Canada is rthird in the world in crude oil reserves, aftVenezuela and Saudi Arabia
5th largest energy producer
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MAJOR OIL COMPANIES
Canadian Natural Resources Ltd.
Encana
Husky Energy
Imperial Oil
Laricina Energy
Nalcor Energy
Nexen
Reform Energy Service
Niko Resources Ltd
Pacific Rubiales Energy
Penn West Exploration
PetroKazakhstan
Suncor Energy
Syncrude
Talisman Energy
ShaMaran Petroleum Corp.
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REGULATORY FRAMEWORK
National Energy Board (NEB), 1959, Minister of Natural Resothe Parliament of Canada
Independent federal regulatory agency (Canadian energy in
Primary Responsibilities
Inter-provincial and international oil and gas pipelines and p
lines,
Export and import of natural gas under long-term licenses aterm orders,
Oil exports under long-term licenses and short-term orders
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REGULATORY FRAMEWORK
PROVINCIAL/TERRITORIAL Producing Provinces- Royalties and Taxes on O&G productio
incentives, grant permits and licenses to construct and operfacilities
Consuming Provinces- Regulate distribution systems and ov
the retail price of gas to consumers
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Petroleum, Natural Gas under the jurisdiction oprovinces
Intergovernmental conflicts sometimes arise Energy consuming provinces elect federal
governments
Energy producing provinces exercise authority
natural resources
Federal government- Foreign treaties requirecooperation of provincial governments
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PROVINCIAL CROWN LEASES A
LICENCES
Relationship b/w Provincial Crown and O&G companies Governed by Provincial Crown PNG Lease
Term of five years
Right to explore and drill
In exchange for rental fees and royalty interests
Freehold PNG lease
Lease automatically extended if there is continuous productexpire at the end of term
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CORPORATE TAXES
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FEDERAL ROYALTIES
1% of gross revenue (GR)first 18 months of production
2% of GR19thto 36thmonths
3% of GR37thto 54thmonths
4% of GR55thto 72ndmonths
5% of GR73rdto last production month preceding payout
Petroleum royalty after payout has occurred are the greater of 35
Revenues and 5% of GR.
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NEW BRUNSWICK
For Collecting shale gas royalties- If the industry develops Two-tier system
1stTier-Lower royalties when companies are setting up
2ndTier-Higher ratesWhen it reaches maturity phase
Ranges from 5% to 12% depending on amount of productio
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ALBERTA
Royalties rates range from 0% to 50% dependent on oil pricproduction. Max payable at 120$/barrel.
Before reaching pay-out- 1% to 9% on gross revenue After becoming profitable- Net Royalty rate of 25%-40% on
revenue
Oil price will influence the royalty rates as follows
Less than $55/barrelprepay out phase1% of revenues
Up to 9% when oil prices reach $120/barrel or higher.
Post-payout -> 25% (oil price < $55) to 40% (oil price >120$)
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Source: http://www.pwc.com/en_CA/ca/e
utilities/publications/pwc-oil-gas-taxation-
http://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdfhttp://www.pwc.com/en_CA/ca/energy-utilities/publications/pwc-oil-gas-taxation-2012-10-en.pdf8/13/2019 Canada - Oil Taxation & Regulations
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M&A, JVs, minority investments involving foreign investors Canadian O&G companies common
Post Economic Crisis and the period of volatile oil price M&Aincrease
Natural gas- oversupply- technological enhancements (shaleprices depressed
M&A deals- Focus on oil reserves in Syria, Egypt, UK, China, offshore West Africa
O&G entities having non-Canadian assets operate Reason-Canada's proven legal and regulatory regime
Strong and mature capital markets
Efficient way to acquire foreign assets