Fraser Institute’s annual Global Petroleum Survey of energy executives ranks Canada oil and gas provinces among the best in the world for investment. The survey ranks 156 jurisdictions worldwide on their attractiveness for investment based on the input of oil and gas industry executives and the oil and gas reserves of each jurisdiction.
Canada’s Most Attractive Province: Alberta
On the strength of its petroleum reserves, Alberta remains the most attractive province for oil and gas investment in Canada, placing second of 27 jurisdictions with large petroleum reserves. “Alberta’s wealth of petroleum reserves continues to attract investment, which creates jobs for scores of Canadians,” said Kenneth Green, senior director of the Fraser Institute’s Center for Natural Resources, in a press release. The only jurisdiction that ranked higher than Alberta was Texas. To be considered one of the jurisdictions with “large” petroleum reserves, the jurisdiction’s reserves had to comprise 1% or more of the total reserves of the entire group surveyed.
Saskatchewan and Manitoba are in World’s Top 3 Small Jurisdictions
Based on the annual survey, British Columbia was number 19 of 44 jurisdictions with medium-sized reserves, and of the remaining 69 jurisdictions with small proven oil and gas reserves Saskatchewan and Manitoba ranked number 2 and 3, respectively. To be considered in the “medium” reserve group the jurisdiction must have more than 0.1%, but not more than 1% of the entire survey group, while the “small” group were those jurisdictions with less than 0.1% of the total reserves in the survey group.
Additionally, the survey features an alternate ranking format, which ignores proven oil and gas reserves and focuses solely on survey responses. In this format, Saskatchewan ranks first in Canada (and third out of the 156 jurisdictions worldwide). Manitoba ranks second in Canada (fifth globally), followed by Alberta (sixteenth globally).
On the other end of the Canadian spectrum, Quebec presents the greatest barriers to oil and gas investment in Canada, the study found. “Quebec continues to sour petroleum investment by delaying authorization for development, to the detriment of many Quebecers who could be working in the resource industries,” Green said.
Negative factors which give jurisdictions low rankings include barriers to investment such as high taxes, costly regulatory obligations, uncertainty over environmental regulations and the interpretation and administration of regulations, and concerns over political stability and security of personnel and equipment.
“As in previous surveys, investors indicate that they continue to turn away from jurisdictions with onerous fiscal regimes, political instability, and land claim disputes. Similarly, investors prefer to avoid jurisdictions with costly, time-consuming uncertain regulations. Other factors being equal, competitive tax and regulatory regimes can attract investment and thus generate substantial economic benefits,” the report said.
When considering policy independently from the size of a jurisdiction’s reserves, the 10 least attractive jurisdictions for investment (starting with the worst) are Venezuela, Bolivia, Ecuador, Iran, Russia—Eastern Siberia, Russia—Offshore Arctic, Iraq, Uzbekistan, Democratic Republic of the Congo (Kinshasa), and Turkmenistan.
A Look at Canada’s E&Ps
“Oil & Gas 360® Looks at Canada’s E&Ps” is a multi-part feature story that examines exploration and production companies developing a wide variety of oil and gas assets in Alberta, Saskatchewan, British Columbia and other provinces.
Manitok Energy (ticker: MEI) is an E&P with operations in the most attractive province for oil and gas investment in Canada—Alberta. Manitok operates mainly in the Canadian Foothills, where it extracts conventional oil and gas, and in Southeast Alberta, where its focus is crude oil. For the nine months ended Sept. 30, 2014, Manitok reported total production of 4,647 BOEPD, up from 3,813 BOEPD for the nine months ended Sept. 30, 2013. In its November investor presentation, Manitok details its current operations, acreage, development plans, company financials, and the path it is taking to reach its production goal of 20,000 BOEPD in five years. Mass Geremia, President and Chief Executive Officer of Manitok Energy, discussed his company’s conventional approach and its assets in Alberta in this video interview from EnerCom’s The Oil & Gas Conference® 19 in August, 2014.
Canadian oil and gas companies highlighted in Part One and Part Two of the series include Crescent Point Energy (ticker: CPG), DeeThree Exploration (ticker: DTX), Manitok Energy (ticker: MEI), Tamarack Valley Energy (ticker: TVE), Encana Corp. (ticker: ECA), Vermilion Energy Inc. (ticker: VET), Crew Energy Inc. (ticker: CR) and Bellatrix Exploration Ltd. (ticker: BXE).
In Part Three of the series, Oil & Gas 360® looks at Canadian Oil Sands Ltd. (ticker: COS), Lightstream Resources Ltd. (ticker: LTS), Peyto Exploration & Development Corp. (ticker: PEY) and Strategic Oil & Gas Ltd. (ticker: SOG).
The complete Global Petroleum Survey from the Fraser Institute may be downloaded here. The institute is an independent Canadian public policy research and educational organization tied to think-tanks in 87 countries. The institute’s Global Petroleum Survey is administered each year to petroleum industry executives to measure barriers to investment in the world’s oil and gas producing regions. This year, a total of 710 respondents representing 563 oil and gas companies completed the survey questionnaire that generated the report data.
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