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Canadian oil sands producers are poised to pay an increasing share of their revenue to the government in coming years as surging oil prices allow them to pay off the costs of multibillion dollar projects earlier than planned. Five oil sands projects reached so-called “post-payout” royalty status last year and two more are expected to do so each year from 2022 to 2025, the Alberta government said in a budget update Wednesday. Oil sands royalties are forecast to reach $20.1 billion (US$15.3 billion) in the current fiscal year, up 73 per cent from the previous fiscal year and $9.7 billion higher than originally budgeted. The windfall from hydrocarbons will contribute to a $13.2 billion budget surplus for the province. Higher oil prices have allowed companies to pay off the up-front costs incurred when oil sands well sites or mines were built, sometimes years in the past. Once paid off, oil sands projects are pushed into a higher bracket for royalty payments, meaning a bigger portion of revenue generated by companies goes to the government. Companies themselves have contributed to the trend as they resist building new projects or expanding older ones in order to pay down debt and return […]
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