Royalty Archive - Oil Sands

 

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Oil sands production royalties are paid in one of three ways;

  • Same as conventional oil (until the project is approved)
  • Under the Oil Sands royalty regulations (approved projects)
  • Or under the terms of the crown agreement (older grandfathered agreements with Syncrude and Suncor)

Projects under the Oil Sands Royalty Regulations have a re-payout or post payout status.

Projects are in pre-payout until their revenues exceed allowable costs. In pre-payout status a projects pays 1 to 9% of revenues as royalties.  The price of West Texas Intermediate Crude (WTI) in Canadian dollars determines that percentage and the percentage is calculated monthly.

When a project’s revenue exceeds allowable costs they move to post payout status and pay the higher amount of either their percentage of net profits or a percentage of revenues. The net revenue percentage varies between 25% and 40% based on the yearly average of the WTI price in Canadian dollars.   A project does not revert is pre payout status if it has no profit, it will pays the percentage of revenue as royalties.

The following tables provide a calendar year summary of production, revenues, costs and royalties for those projects in pre payout, post payout and those paying conventional oil formula royalties.  The second table provides information on bitumen production and what percentage is upgraded in Alberta.

Oil Sands Pre-payout Projects (1997-2010 )

Prod-
uction Year 

Number
of
Projects

Prod-uction  (1000
M3)

Sales Revenue
($1,000)  

Operating Costs  ($1,000)

Diluent Cost   ($1,000)

Capital Cost($1,000)

Other  Costs ($1,000)

Royalties
($1,000) 

Return Allow-ance ($1,000)

 Other Net
Proceeds
($1,000)

1997

    17 

847

79,798

     63,756

17,956

166,088

     1,553

722

9,614

        992

1998

    29

3,541

251,358

   126,379

48,298

343,543

   19,762

1,972

53,364

     2,328

1999

    36

5,336

813,826

231,212

138,693

249,620

   30,593

6,804

85,607

     2,005

2000

    40

6,650

1,354,314

369,491

244,969

    913,591   37,033

14,978

241,321

   18,129

2001

    43

6,603

967,796

    482,794

288,966

 1,614,639   35,367

8,404

474,655

   58,935

2002

    44

7,026

1,591,961

    416,596    448,884 1,917,709   56,901

13,333

603.810

   45,648

2003

    47

12,711

2,670,655

 1,385,557

694,437

    791,780 138,704

20,674

677,866

 145,417

2004

    50

17,800

4,445,439

 1,549,059 1,173,009 1,480,091 188,617

32,328

727,935

 114,634

2005

    39

21,095

6,007,148

 1,971,040

1,739,849

 2,549,409 210,550

42,904

752,064

 158,497

2006

    50

19,909

6,396,836

 2,272,873 1,453,531 4,369,063 199,629

49,607

836,195

   87,880

2007

    54

19,057

6,260,826

 2,552,888 1,294,339 7,407,610 253,686

49,728

1,155,422

   99,298

2008

    56

16,295

9,960,279

 2,973,317 2,942,820 8,648,989 240,871

71,892

1,387,535

 159,584
2009

    53

   19,361   8,779,960 2,968,753 2,828,407 5,346,583     2,042  173,109 1,626.747 138,686
2010     49   21,277 10,689,165 3,334,005 3,495,816 8,209,637     1,600  295,367 1,841,497 127,798

Production includes the Bitumen, Blend, SCO, WCS and other volumes.

Other Costs include
(1) Return allowance on Previous period's Net Loss
(2) Net Loss Carried Forward from Prior Periods
(3) Excess Gross Revenue Royalty over Net Revenue royalty Paid during Previous Period. 
Bold indicates numbers updated in 2011.

Oil Sands Bitumen Upgrading (1997-2010)
Sources: Energy Resources Conservation Board (ERCB)-ST-39 and ST-43 (mined bitumen) and ST-53
(in-situ bitumen) reports

Production
Year 		  Total Crude Bitumen Production 
( Bbls/Day )

   % of Total Bitumen Upgraded 
1997   558,215  59%
1998    653,008  56%
1999    668,312  60%
2000    667,616  57%
2001    725,051  58%
2002   843,147  64%
2003   959,537  64%
2004 1,086,955  65%
2005 1,066,290  59%
2006 1,254,705  63%
2007 1,320,749  62%
2008 1,305,286  59%
2009 1,489,753  60%
2010 1,613,434  58%

Definitions: 
Total Crude Bitumen production is the sum of In-Situ bitumen production and Mined bitumen production;
Total crude bitumen production does not equal the total marketable oil sands production, which is the sum of
marketable bitumen and synthetic crude oil production.  Some volume is reduced in the process of converting
crude bitumen into synthetic crude oil; therefore, crude bitumen total production is always higher than the
marketable oil sands production.
Bold indicates numbers updated in 2011.

 Oil Sands - Post-payout Projects (1997-2010)

Prod-uction Year

Number
of
Projects

Prod-uction  (1000 M3)

Sales
Revenue
($1,000)

Operating Cost 
($1,000)

Diluent Cost   ($1,000)

 Capital
Cost
($1,000)

Other Allowable Costs ($1,000)

Royalties ($1,000)

 Return
Allow-ance
($1,000)

Other Net Proceeds ($1,000)

1997

    2 

8,906

948,590

233,444

417,935

    197,098

0

38,646

            0

271

1998

    2 

10,726

734,074

213,411

356,621

      77,090

0

33,483

        198

1,427

1999

    3 

9,577

1,235,326

253,846

369,592

      50,000

0

166,509

        845

2,407

2000

    8 

10,460

2,032,519

464,266

685,636

    224,325     39,837

180,332

            0

5,918

2001

    10 

19,443

3,231,428

2,811,229

707,337

 1,805,656     48,433

73,331

            0

21,308

2002

    15 

36,583

8,449,722

   3,391,240    586,259 2,701,229   165,540

180,357

 125,410

25,664

2003

    18 

38,059

9,250,711

   4,065,141

753,339

 3,179,595   217,737

353,174

   59,510

69,539

2004

    31

39,793

11,730,046

   3,963,596    907,961 3,718,192   226,472

783,350

   74,963

131,278

2005

    32 

36,326

13,126,230

   5,064,871 1,366,121 3,891,971   210,449

743,421

   67,924

889,277

2006

    37 

47,193

19,134,446

   6,221,039 1,669,883 2,583,300   268,773

2,129,884

   24,656

731,473

2007

    38 

52,350

22,338,022

   7,151,888 2,394,466 3,076,462   281,492

2,517,342

        202

460,104

2008

    46 

57,652

32,777,288

 10,441,332 3,401,016 5,560,579   456,807

3,606,334

          98

1,349,787
2009

    51

 69,190 22,539,917   8,261,481 2,122,962 4,751,443          816 2,144,349        288    340,559
2010     54 77,291 28,401,864   9,145,723 4,111,707 5,407,039          769 3,225,834     8,817    432,925

Production includes the Bitumen, Blend, SCO, WCS and other volumes.

Other Allowable Costs include
(1) Return allowance on Previous period's Net Loss
(2) Net Loss Carried Forward from Prior Periods
(3) Excess Gross Revenue Royalty over Net Revenue royalty Paid during Previous Period. 
Bold indicates numbers updated in 2011.

Oil Sands Production and Royalties from Non-project Oil Sands Wells

Production
Year 		 Number of 
Wells 		 Total
Production
(M3)

Crown
Production
(M3) 

 Royalty
Volume
(M3)		 Royalty 
    %		 Royalties
($1,000)
 1997    73   86,989    66,402   14,304 21.54%    2,271
 1998  109 127,996  110,459   18,194 16.47%    2,119
 1999  125 147,416  124,681   19,351 15.52%       301
 2000  134 135,701  113,681   27,310 24.04%    4,362
 2001  104 127,162  107,661   22,008 20.44%    1,865
 2002  272 368,974  358,703   79,916 22.28%  16,496
 2003  343 513,114  495,015 111,461 22.52%  33,733
 2004  476 515,198  477,986 102,246 21.39%  15,465
 2005  383 614,145  562,638 132,814 23.61%  34,835
 2006  481 655,080  560,927 129,162 23.03%  56,732
 2007  440 616,080  504,312 116,755 23.15%    9,459
 2008  416 574,727  459,104 108,793 23.70%  22,471
 2009  377 559,732  407,358   89,544 21.98%  28,445
 2010  529 789,812  652,996 109,668 16.79%  49,289

Royalties are assessed on oil sands wells that are not included in an approved project using the
conventional oil well royalty rates.
The difference between Total production and Crown production is Freehold production.
The royalty dollars are from the department’s financial reporting system and so reports revenue
with all previous years changes incorporated into the current year.

Please note:

 return to main historical data