Canada’s main oil-producing province of Alberta on Thursday said the 2023/24 budget surplus would be smaller than initially estimated, partly due to losses incurred by the Sturgeon refinery, which is joint-owned by the province.
The Alberta finance ministry said the surplus would be C$4.3 billion, down from the C$5.2 billion surplus forecast in the February budget.
Provincial revenues were C$4.1 billion higher than estimated in the budget, while expenses were C$2.2 billion more than estimated due to disaster and emergency supports.
But net income from government business enterprise was C$1.5 billion lower than forecast, mainly because of a C$1.3 billion non-cash adjustment to the Sturgeon Refinery’s processing agreement, the province said.
“The additional decrease from budget was due to a larger loss than was budgeted at the Sturgeon Refinery due to weaker commodity prices,” Alberta said in its year-end report.
The 79,000 barrel-per-day refinery near Edmonton is owned by the Alberta government and Canadian Natural Resources Ltd.
The project was built with the backing of the government, which signed contracts in 2011 agreeing to pay for the oil sands bitumen it receives in royalties to be processed into higher-value crude at the refinery. But costs soared to nearly more than C$10 billion ($7.31 billion) before the refinery was completed in 2020.
Many analysts have criticized the Alberta government for signing a tolling agreement that left the province exposed to higher risks and costs.
In 2021 Alberta bought out North West Refining’s 50% equity stake in a bid to reduce its processing costs.
(Reporting by David Ljunggren in Ottawa and Nia Williams in British Columbia; Editing by Leslie Adler)