Panic In The Oil Patch

Oh dear, isn't it downright inconvenient when a partnership turns sour. When, in fact, the provider-owner of a particular resource of great desirability on the road-wheeling market suddenly realizes the deal struck between itself and investor-extractors profits them far more than it does the primary-resource owners. It's like the greedy lawyer who plies his trade for maximum share of successfully-plied judgement proceedings.

One-third for the client, two-thirds for the stable of attorneys-at-law. What's currently, and for the foreseeable future, the most profitable, desirable and needed product on the globe? Why energy sources. The better to fuel booming economies, in this increasingly tight little world of production, purveyance and services. You say you've got an immense store of inconveniently-stored fossil fuels? At your service, glad to assist in extraction.

And everyone profits. More or less. More if you're an international conglomerate accustomed to making deals ultimately far more profitable to your shareholders than to the fortunate yet investor-dependent arm of government with whom such deals are made. Less, alas, if you're the legitimate geography-based holder of that (almost) priceless base product. But when the deal is stale, with no appropriate up-dating, then it's a steal and intolerable.

Much consternation now the result of the Province of Alberta mooting about its intention to demand a new deal resulting in a higher profit for the province, from oil and gas extraction. Who owns the stuff, after all? Why the people of Alberta, that's who, and their government is expressing its intent on behalf of the voters. The financial community and the oil sector is aghast.

Why? the province did its own homework resulting in a recommendation approved by most Albertans to run for the money. The nerve!

They're doing the province a great big favour in taking all that valuable stuff in its nastily raw state off the hands of the rightful owners and throwing them a pittance in exchange. They're threatening to pull out, having a hissy fit at the prospect of eating into their vast profits to satisfy a few percentile-rise transfers to the provincial purse.

Warning that this "dramatically erodes the value of many oilsands projects and will lead to project cancellation or postponement."

Yup. Sure it will. Go on with you. Do it fellas, head right on out to the Persian Gulf and try your hand there. Try Sudan, (indulge in a little friendly sparring with China). Try Russia, see what kind of whopping deal you'll get out of them. They're laughing all the way to the bank; you won't be. It's kind of crowded there. Thought about Mexico? How about other offshore prospects; North Sea?

Oops, those indignant investors are playing hardball, lobbing that "r" word around recklessly. Alberta courting a r-e-c-e-s-s-i-o-n because she's holding out for her just due? Interesting theory; prepared to back it up? Facts, figures, statistics, that sort of irrelevant stuff.

Checked with those energy-anxious countries whether they're on side, prepared to forego the convenience of sufficient gas and oil to heat, power the engines of commerce, move vehicles on the roads?

G'wan, with ya!