Province looking to overhaul offshore oil royalty regime by November
The Newfoundland and Labrador government is planning to overhaul the generic offshore oil royalty regime before the upcoming provincial election in November.
The Tories have been promising to overhaul the royalty regime since 2007, but are now trying to finalize a new set of rules that determine how much money the province makes from oil projects.
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Government has been consulting with industry stakeholders about the proposed changes for several weeks now, seeking input before finalizing any modifications.
Government doesn't stop because there's an election coming — we have decision to make.- Minister Derrick Dalley
The province said the changes would help oil industry members plan developments for Newfoundland and Labrador. Any changes are scheduled prior to an offshore land auction set for mid-November.
Natural Resources Minister Derrick Dalley says the oil companies want a full accounting of what the royalty rates will be before then, which has prompted government's push for an overhaul.
"They want more certainty, they want to understand the financial situation in which they would be coming into the province and developing in our offshore," said Dalley.
"We're working hard to get them that certainty as we go out to the land sale, so the primary purpose … we have a land sale coming up, we are really excited about that land sale and we want to provide these companies — global companies, not only the existing companies in our province but others — with that certainty."
McCurdy said the run-up to an election when oil prices are low is the worst possible time to re-structure the royalties regime, but the struggling government is looking for a win.
"I think that's poppycock, this is all about a photo-op for them and I believe this is probably just about the worst time to be putting together a generic royalty regime," said McCurdy.
However, Dalley said the decision is simply about getting business done and the upcoming election holds no sway.
"I think what we're seeing here the last five or six months everything we're doing, certainly anything positive that we're doing, the response has been from the opposition that we're trying to do this for an election," said Dalley.
"Well, government doesn't stop because there's an election coming — we have decisions to make."
Dalley didn't provide any details on the changes to the royalty regime, but said it would be "enhanced" beyond what is in place right now.
He said government's intention is to have it in place before the Nov. 12 offshore land sale, which means it will have to be done before the election campaign begins sometime in the first few days of November.
With files from David Cochrane