The Alberta Royalty Review Panel used flawed data, incorrect costs, misleading activity assumptions and poor international comparisons to put together its oil and natural gas royalty and tax system proposal, according to a technical review by the Canadian Association of Petroleum Producers (CAPP).

CAPP, which represents 150 companies that together produce more than 95% of the country's oil and gas, issued a stinging assessment of the royalty review panel's recommendations last week in yet another response to the recommendations issued last month (see NGI, Sept. 24). Although they are widely supported by Albertans (see NGI, Oct. 8), the recommendations have triggered an uprising among Canada's producers and oilfield service contractors (see NGI, Oct. 15).

In a technical review, CAPP stated that it did not believe the panel achieved the province's objectives in finding a balance between a "reasonable royalty and tax system and a healthy, sustainable oil and gas industry." CAPP said its "areas of concern" include:

Alberta Premier Ed Stelmach is expected to make a speech regarding the royalty panel's recommendations in the next few days. CAPP's 45-page report may be downloaded at www.capp.ca.

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