Alberta expects oil sands investment “immediately” following new royalty regime changes, finance minister says
USO•Alberta expects new oil sands investment “immediately” after changing royalties for new projects. Starting in 2027, qualifying projects will pay a 2% royalty for five years, rising gradually to 6% in years nine and 10.
1. New royalty rates
Alberta Finance Minister Jason Nixon said the province should see new oil sands investment “immediately” following changes to its royalty regime. Alberta is reducing fees to spur investment in new projects and boost oil output.
2. Rates and eligibility
Starting in 2027, companies can submit projects for consideration for the new rate, which applies only to new oil sands developments or expansions of at least 5,000 barrels per day. The rate is 2% of gross revenue for the first five years, then increases by 1 percentage point annually until reaching 6% in years nine and 10. After 10 years, approved projects revert to the existing framework.
3. Existing framework
Under the current approach, companies pay royalties of 1% to 9% until they recover project costs, then 25% to 40% of net revenue. Officials said savings will vary by project and the aim is to make building and expanding oil sands projects more attractive.
