Oilsands firm delays its forecast over new Alberta government

An oilsands company has cancelled its presentation of future spending plans because of the new NDP government in Alberta and potential new policies.

Alberta premier responds after Canadian Natural Resources won't provide spending outlook

Canadian Natural Resources cancelled its forecast event, blaming Alberta government uncertainty. (Canadian Press file photo)

An oilsands company has cancelled its presentation of future spending plans because of the new NDP government in Alberta and potential new policies.

Canadian Natural Resources announced Wednesday it will not be hosting an open house presentation with investors.

"Due to the current uncertainty surrounding the government of Alberta's review of royalty, taxation, environmental and greenhouse gas policies, detailed future capital allocation plans for each of the company's assets cannot be finalized at this time," the company said in a release.

The company will instead have a conference call next month to discuss its strategy to combat low oil prices.

"I think they are certainly sending a message," says Sonny Mottahed of Black Spruce Merchant Capital in Calgary. "But I wouldn't call it purely semantics or posturing. If capital needs to find a new home, you will find places with the most appropriate risk-adjusted rate of return."

Several oil and gas industry leaders have expressed fear about what new policies the NDP government will introduce. The anxiety seems to persist.

"There's certainly lots of uncertainty. People are holding their breath and pausing to wait and see what happens," says Mottahed.

Notley responds

Alberta premier Rachel Notley responded to the company's comments by saying she welcomes industry feedback, but she is sticking with her intentions to review royalties and address greenhouse gas emissions.

"I think a lot of people and indeed other leaders within the oil and gas industry have suggested there is uncertainty that is created by climate change issues. Frankly, failing to deal with those issues creates as much uncertainty as dealing with them," said Notley to reporters in Calgary.

The premier says she has spoken to Canadian Natural Resources chairman Murray Edwards over the phone and described it as a good conversation. Notley told reporters that the government owes it to Albertans to review royalty rates, to ensure the system is fair. She also said any changes to energy sector policy will be done in consultation with industry.

"To suggest that we never change anything ever, ever, ever going forward, I don't think is particularly responsible," she said. 

Royalty review

A former member of the Alberta government's 2007 royalty review panel says Canadian Natural Resources may be getting too far ahead of itself in pausing its planning process out of fear of what might happen.

"It's not up to me to say whether it is gamesmanship or not," said Judith Dwarkin with ITG Investment Research. "The fact is, raising the prospect of a review of royalties does introduce another element of uncertainty into the operating environment of the industry.

"We don't know how the review will be done, how long it will take and what its conclusions might be. So to get too excited about it at this point might be jumping the gun a bit."

Canadian Natural Resources declined an interview but did issue a statement.

"The company will continue to allocate capital prudently in this low commodity price environment and detailed future capital allocation decisions will be finalized when greater clarity on these issues are attained," a spokesperson said in an email. "Canadian Natural looks forward to working together with the Alberta government to deliver our mutual goal of a prosperous Alberta that creates jobs and benefits for all Albertans."

Canadian Natural Resources executives were diplomatic in their remarks earlier this month when discussing the change in government.

"We are committed to working with the new government," said chief executive Steve Laut to investors at the company's annual general meeting. "We share a common goal; a strong, prosperous Alberta that's fair to all Albertans."

The NDP were elected with a majority of seats and ended more than 40 years of PC government. Notley ran on a campaign to review oil and gas royalties and increase corporate taxes from 10 per cent to 12 per cent. The government has not set a timeline for when the review will take place and it is not clear whether the outcome will change the royalty structure.

Notley has said repeatedly that industry has nothing to worry about. In the 24 hours after her election night victory, she reached out to several large oil and gas company executives to start building a relationship with the energy sector.

While some industry leaders have voiced their concern about the NDP, others have had a very different tone. Encana CEO Doug Suttles told reporters earlier this month, "you would almost have to be from another planet not to understand how important oil and gas is to Alberta and Albertans."

Canadian Natural Resources is an oil and gas company operating in western Canada and internationally, including in the North Sea.


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Member

Join the conversation  Create account

Already have an account?