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Who Owns Alberta Canada's Oil?

Updated on February 8, 2016
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Vested Interests

Alberta Energy, a department in the provincial government in Alberta, Canada, manages oil sands royalty and tenure regulations, as well as Crown and individual agreements to ensure that royalties and rentals are calculated and collected for the benefit of the people of Alberta. These royalties help pay for everyday services that Albertan’s enjoy, like healthcare and education. High amounts of financial transfer payments are provided to the Federal Government which is added to the country's budget and shared with the other provinces. As a result, everyone in Canada benefits or experiences losses because of factors that affect our energy industry.

In 2012, research by Forest Ethics Advocacy on an analysis of shareholder information from Bloomberg Professional, found 71% of the ownership of oil sands production was foreign, while the foreign-based companies controlled 24.2% of the sector’s production. As the majority of investments are foreign, profits are predominantly directed out of the country.

Also in 2012, the federal government either cut or gutted every piece of environmental legislation designed to protect our land, air, and water while aggressively pushing for the expansion of the tar sands and the building of new pipelines. Then Prime Minister Stephen Harper claimed to do this in the name of Canada’s national interest while attacking anyone who disagreed. The new Prime Minister, Justin Trudeau's government has not restored environmental legislations or funding to date as of February 2016.

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Oil Cartels 101

The Seven Sisters were Anglo-Saxon oil companies which largely controlled the Middle East’s oil production after World War II until the 1970s. The book, The Seven Sisters in 1975, describes the shadowy oil cartel, which tried to eliminate competitors and control the world’s oil resources. As a cartel, the Seven Sisters were initially able to exert considerable power over Third World oil producers. However, in recent decades the dominance of the Seven Sisters and their successor companies has been challenged by the increasing influence of the OPEC cartel. The Seven Sisters cartel became Exxon (U.S), British Petroleum (BP/U.K), Esso/Exxon and Chevron (U.S).

The Big Oil or Supermajors Cartel is now a name used to describe the world's seven or eight largest publicly owned oil companies.The super-majors are considered to be British Petroleum, Chevron, Exxon Mobile, Royal Dutch Shell, Total SA, ENI and Conoco Phillips.

The OPEC Cartel, The Organization of the Petroleum Exporting Counrtries is an intergovernmental organization of Petroleum exporting nations, founded in 1960 headquartered since 1965 in Vienna Austria. These countries account for 40% of global oil production and 73% of the world's proven oil reserves and makes OPEC a major influence on global oil prices. As of January 2016, OPEC has 13 member countries: six in the Middle East North Asia, South East Asia, four in Africa and two in South America. The OPEC companies are not part of the super majors and are lead by Saudi Arabia, Iran and Iraq.

The IEA Cartel, the International Energy Agency is a group of governments. The IEA was initially dedicated to responding to physical disruptions in the supply of oil, as well as serving as an information source on statistics about the international oil market and other energy sectors. It has been accused by scientists, social justice groups and watchdogs of manipulating data and reports to influence the markets.

U.S Big Oil Cartel vs. OPEC Oil Cartel

On the surface there are continual price wars between the two cartels, east vs. west. Most Big Oil companies struggle at $75 a barrel, said Alastair Syme, an oil analyst at Citigroup. “In the pursuit of growth in recent years, we think many companies have not left enough headroom to deal with a lower oil price environment,” he said. Prices below $30 could put some companies into bankruptcy some foresee. A Bloomberg Finance report claimed oil companies are spending more on production and will have to reduce spending, access cheaper projects and even take on loans to pay down dividends.

Alberta Oil Sands

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Alberta Oil-Tar Sands

The high producing companies invested in the Alberta Oil/Tar Sands are (500,000 plus bpd- barrels per day):

Albian Sands Energy Inc. is a joint venture by Shell Canada (owned by Anglo-Dutch Royal Dutch Shell), Marathon Oil (U.S./Can) and Chevron Corp. (U.S.).

Syncrude Canada is a joint venture owned in order of share holdings: Canadian Oil Sands Ltd. (Encana/Can), Imperial Oil (Exxon Mobile Corp. U.S. -Rothschilds), Suncor (Can), Sinopec (China), State Owned Enterprise (China), Mocal Energy (Japan), Murphy Oil (U.S.).

Suncor is a public company in Canada and parent company to Sunoco, a subsidiary of the Energy Transfer Partners of Dallas Texas U.S. Suncor also markets through a retail network of its Phillips 66 branded outlets in Colorado U.S.. It also owns Petro-Canada, formerly a government Crown Corporation.

Canadian Oil Sands Limited is a Canadian company that generates income from its oil sands investment in the Syncrude Joint Venture.

Canadian Natural Resources Ltd. is a public company in Canada and was one of the highest producers in 2014. It is based out of Calgary, Alberta. CNRL was considered Canada's largest oil company and Canada's single biggest conventional heavy oil producer.

Synenco Energy Inc. and SinoCanada are subsidiaries of China-based Sinopec Group. Sinopec has paid Synenco $38 million cash for an approximate 14.5 per cent interest in the Northern Lights Project's assets and production.

Oil companies with average under 500,000 Bpd production:

Imperial Oil is a public company in Canada but majority shares are held by the U.S. Exxon Mobile Corp. Imperial owns a quarter of shares in Syncrude Canada. Most of Imperial's oil production is in Alberta with most of its owned refineries in the U.S. It owns Esso, On the Run Express and Tiger Express Stations.

Husky Energy is now a public Canadian company with global interests. Husky Energy was originally founded in 1938 at Wyoming in the United States, as the Husky Refining Company. In 2003, it also purchased the Canadian unit of the American-based Marathon Oil.

British Petroleum (BP) based in London, England is one of the largest seven dominant oil companies. Formerly majority state-owned, the British government privatized the company in 1987.

Other corporations with vested interests include: Value Creation (Can), Nexen (Can), Chervron (U.S.), Stratoil (Norway).

Source: Wikipedia

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The Market and Climate Change

Peak Oil Point

Most news agencies are reporting very little on the presumption of reaching the high peak of Peak Oil production in about 2008ish to a 2010 plateau that has lead to a steady decline since. Whether anyone believes the Peak Oil has been reached or not, investors have considered it. This has alarmed many investors who have liquidated stocks also causing stock devaluations in major companies. Add to this the ongoing price battle between the Big Oil - Super Majors Cartel and the OPEC Cartel that continues and is perpetually ongoing. While this ensues, ordinary people suffer substantial job and income losses.

Global Policy

Yet on a global scale, world leaders gathered in Paris in December 2015 to negotiate and agree upon what is required to keep global temperatures from rising 2 degrees Celsius. Consensus occurred due to many countries experiencing catastrophic global climate change effects and the realization of a possible Peak Oil point. This lead to countries submitting commitments to substantial emission reductions by 2030- which vary from country to country.

Canada submitted to reduce emissions 14% below 1990 levels by 2025 which critics see as low compared to the European Union's commitment of 40%. Overall global emissions reduction goals should be 'zero' emissions to halt global warming and climate change in its tracks. They all fall way short and the public loses as they must face climate change with emergency preparedness due to lack of actual commitment or effective policy and laws to reduce emissions and promote renewables.

The Clean Energy Shift

Since the renewable energy members defected from the International Energy Agency IEA cartel due to corruption in 2008. In 2010, the International Renewable Energy Agency IREA, the new watchdog organization, released a report entitled REThinking Energy and another follow-up to this in 2015 encouraging investments in renewables as the key strategy to reduce emissions and mitigate climate change.

As a result, substantial investments are taking place world wide and in Canada approximately 12.7 billion in growth in 2014, an 88% increase over 2013. Ontario was the first and only province to pass a Green Energy Act attracting most of the country's growth in clean energy investments. Investments and new policies were seen in British Columbia and Quebec with smaller investments in other provinces limited due to a lack of policy support from governments says Clean Energy Canada. Alberta experienced 2.3 billion in investments in 2014.


References:

U.S. vs. Saudi Arabia's OPEC: Who's really winning the oil and gas race?, 2015. http://www.pennlive.com/news/2016/01/us_vs_saudi_arabias_opec_whos.html

Any End in Sight for the Big Oil Slide? Commodities, 2015.http://www.ft.com/intl/cms/s/0/7997e8e8-a324-11e5-8d70-42b68cfae6e4.html#axzz3zWpxXwyy

Clean Energy Canada, Tracking the Energy Revolution, 2015. http://cleanenergycanada.org/trackingtherevolution-canada/2015/

Majority of Oil Sands Ownership and Profits are Foreign, says Analysis, 2012. http://business.financialpost.com/news/majority-of-oil-sands-ownership-and-profits-are-foreign-says-analysis

Wikipedia.com, Big Oil, 2015. https://en.wikipedia.org/wiki/Big_Oil

Alberta Energy, Oil Sands, 2015. http://www.energy.alberta.ca/ourbusiness/oilsands.asp

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