The Alberta Government has announced a new way to maximize its resource revenue.
After conversation with the Alberta Petroleum Marketing Commission (APMC), the province will now collect bitumen royalties in kind (BRIK). These BRIK royalties will be in addition to conventional royalties in kind (CORIK).
"This program gives the province greater say in where we sell our oil," said Premier Danielle Smith, in the release announcing the change. "Receiving bitumen royalties in-kind is another tool in our investment toolbox and will give us the opportunity to maximize our resource potential, become one of the most significant players in the heavy oil market and garner more value for Albertans.”
The APMC is Alberta's commercial oil and gas agency, responsible for marketing the province's resources. With the APMC now handling "significant volumes" of petroleum products of both conventional and bitumen royalties, the agency will be able to spur private sector investment, according to the release.
"This will give government the ability to seek new deals on Alberta’s energy resources internationally, making the province one of the largest global heavy oil market players and maximizing the return for Albertans," notes the release.
Premier Smith met with a potential multinational global oil and petrochemical client on March 10 to discuss the possible transport and sale of around two million barrels per month of Alberta-owned heavy oil through the APMC.
"Alberta and Canada have benefited greatly from the innovation and investment of our partners, the companies driving our energy industry," said Minister of Energy and Minerals Brian Jean, via the release. "This move will allow us to promote increased pipeline capacity and grow our global markets, which is good for Albertans, for industry, and for global energy security.”
With significant volumes of conventional and bitumen barrels becoming available through the new royalty system, the APMC can work with other "jurisdictions and industry players" ensuring all Albertans get the most out of the province's natural resources.
The release concludes by noting that the transportation of these additional barrels of bitumen to buyers will help spur pipeline capacity in Alberta. Alberta is pursuing a goal of doubling production capacity and diversifying its economy given the current unstable trade situation with the United States.
"APMC will work diligently to seek commercially prudent deals that make sense for Albertans and the Alberta energy industry," said Adrian Begley, APMC chief executive officer. "The opportunity exists to find transactions that will directly and indirectly secure extra value for Albertans, and the experienced team at APMC is committed to doing just that.”
