ConocoPhillips has joined with Alberta-based producers to express its disappointment in the province’s proposed oil and natural gas royalty regime changes.

The Houston-based producer’s Alberta-based subsidiary explores for, develops and produces oil and natural gas across Western Canada. Near Fort McMurray, AB, ConocoPhillips extracts bitumen from oilsands at both operated and nonoperated projects.

In a private letter to Alberta officials, Conoco warned that a proposed “super-royalty’ on oilsands production “dramatically erodes the value of many oilsands projects and will lead to project cancellation or postponement.” EnCana Corp., which has partnered with Conoco on some oilsands projects, said Sept. 28 that it would cut C$1 billion in investment from Alberta, and days ago, Petro-Canada and the former CEO of Talisman Energy Inc. said their companies also would reduce spending in the province (see Daily GPI, Oct. 4).

Conoco, which partners with EnCana in the oilsands, also signaled that a recommendation from the panel concerning bitumen, a low-grade oil, could artificially impact the market and “may come under the scrutiny of international trade agreements.

“If implemented, these measures will at best slow and at worst eliminate investment,” ConocoPhillips stated. “Accordingly, we believe Albertans will not realize the incremental C$2 billion of royalties sought by the report as they will end up with a larger piece of an increasingly smaller pie.”

The oil major also noted that its natural gas business in Western Canada already is feeling the effects of a “major slowdown in drilling,” and if the tax changes become permanent, it could impact as many as 37,500 direct field workers.

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