The new Oil Sands Growth Program will attract new oil sands investment, increase production, fill new pipelines and drive economic growth.
The Oil Sands Growth Program (OGP) will provide the necessary framework for investment in the growth of new oil sands projects. New oil sands production will be eligible for the OGP royalty rates for 10 years, making it more attractive for companies looking to invest billions of dollars in new projects. By making it more attractive to build and expand oil sands projects, Alberta is creating the conditions for long-term growth, new jobs and increased royalty revenues. This will protect the Alberta tax advantage, increase Heritage Fund savings and help pay for the schools, hospitals, roads and social programs Albertans rely on.
Alberta has set an ambitious goal of doubling oil production to eight million barrels per day, potentially generating approximately $205 billion in cumulative additional revenues by 2040 and over $1.3 trillion by 2060. With new pipeline capacity on the way, Alberta needs major new investment to increase production and fill those pipelines.
“Alberta has the resources, the expertise and the ambition to remain a global energy leader. The Oil Sands Growth Program will make the province even more attractive for investment, help get new oil sands projects moving and grow production for the long term.”
Approved projects would receive a guaranteed 10-year royalty framework. Participating projects would pay a two per cent royalty rate for the first five years, increasing by one percentage point annually until reaching six per cent in years nine and 10.
The OGP supports Alberta’s commitments under the Canada-Alberta-Oil Sands Alliance memorandum of understanding, including coordinated fiscal and regulatory frameworks for sustained oil sands investment and production growth.
“Oil sands projects require significant upfront capital and long-term certainty. By providing a predictable royalty framework during the critical early years of eligible projects, the Oil Sands Growth Program will help companies turn investment decisions into a new windfall for Albertans.”
“Alberta’s oil industry is the engine of our economy and a key pillar of the Alberta Advantage. By opening the door for new investment, we’re bringing more good jobs for Albertans and more revenues to support the health care, education and services families rely on every day.”
This program will boost more than just royalty revenue. It will drive tens of billions of dollars of investment to Alberta, create tens of thousands of jobs and fund rural municipalities with billons of dollars in property taxes.
“The province’s Oil Sands Growth Program is a material step in the right direction to encourage investment in Alberta by making our fiscal and regulatory systems globally competitive. Alberta is telling the world our province wants to compete, drive growth and unlock new opportunities in the oil and gas sector, creating jobs and helping to fund the services Albertans and Canadians rely on every day. Cenovus Energy looks forward to working with the Government of Alberta to successfully implement the program and accelerate new production in the province.”
– Jon McKenzie, president and CEO, Cenovus Energy
“Today’s announcement is a positive step toward creating a globally competitive fiscal and regulatory environment in Alberta that attracts and incentivizes capital investment for growth in the oil sector that will benefit Albertans and Canadians for decades to come.”
– Rich Kruger, CEO, Suncor
“The Alberta OGP combined with the federal government’s announced Productivity Mega Deduction, enhances Canada’s competitiveness for capital investment on a global scale. Canadian Natural looks forward to finalizing the details of the definitive agreements required to achieve our shared objectives in the memorandum of understanding of additional market egress, production growth and the Pathways Project.”
– Scott Stauth, president, Canadian Natural Resources Limited
“We welcome today’s announcement from the Government of Alberta and appreciate its continued leadership in creating the conditions needed to attract new investment to Alberta’s oil sands. The Oil Sands Growth Program, together with other important fiscal, policy and regulatory reforms, represents an important step toward creating the investment certainty needed to compete for future growth capital at Surmont.”
– Nick McKenna, president, ConocoPhillips Canada
“Imperial welcomes the Government of Alberta’s continued efforts to strengthen the province’s investment climate. The Oil Sands Growth Program is another positive step in creating the conditions needed to support long-term growth in the oil sands, creating jobs and ensuring global competitiveness of Alberta’s energy industry.”
– John R. Whelan, chairman, president and CEO, Imperial
“Alberta has set a goal of doubling oil production over the next 10 years, and Strathcona intends to do more than its share by growing from 125,000 barrels per day to 300,000 barrels a day by 2036. The program gives us the confidence to invest in new projects now, creating jobs and generating taxes and royalties for Albertans for decades to come.”
– Adam Waterous, executive chairman, Strathcona Resources Ltd.
“The Oil Sands Growth Program is another important step in creating a globally competitive fiscal and regulatory framework that will allow industry to attract the capital required to materially grow production. These investments will create tens of thousands of jobs and provide governments with tax and royalty revenues for decades to come.”
– Kendall Dilling, president, Oil Sands Alliance
“This incentive program will attract investment and support not only oil sands growth, but also growth in natural gas, light oil and condensate production across an integrated energy sector – generating jobs and activity across all corners of the province.”
– Tristan Goodman, president and CEO, The Explorers and Producers Association of Canada (EPAC)
See the official statement on the Government of Alberta website here.