After a big drop in oil and natural gas prices last year, the Alberta government is looking forward to a period of relative stability for its resource revenue estimates out to 2027.Despite a lower base oil price estimate of USD$74 per barrel of West Texas Intermediate (WTI) crude — it was almost $90 in 2022 — the price difference for a barrel of Alberta’s signature Western Canadian Select (WCS) bitumen blend is expected to shrink to $13.60 by 2026 thanks to the commencement of the Trans Mountain pipeline to the West Coast.In the same period, combined light and heavy oil production is expected to steadily rise to 4.1 million barrels per day (bpd) from 3.8 million bpd last year..“Additional pipeline capacity is poised to expand market access and bolster Alberta oil prices. There is optimism among Alberta's oil and gas producers, despite political and regulatory uncertainties from the federal government.”2024 Budget.In addition, natural gas prices are expected to nearly double to CAD$3.80 by 2027 from $2.20 last year when the LNG Canada project comes on stream at the end of this year.But it will mean a short term $2.1 billion revenue hit in 2024-25 until those projects are fully operational. Most of the shortfall is due to lower bitumen royalties that are expected to fall to $12.5 billion this year from $14.3 billion collected year.The higher figure was despite the fact oil prices came in at $76.50 per barrel compared to its $79 forecast.“While Alberta’s economic prospects remain optimistic, government revenue continues to be volatile as a significant portion is highly sensitive to global economic conditions including commodity prices, interest and exchange rates, and financial markets,” it said.“Additional pipeline capacity is poised to expand market access and bolster Alberta oil prices. There is optimism among Alberta's oil and gas producers, despite political and regulatory uncertainties from the federal government.”
After a big drop in oil and natural gas prices last year, the Alberta government is looking forward to a period of relative stability for its resource revenue estimates out to 2027.Despite a lower base oil price estimate of USD$74 per barrel of West Texas Intermediate (WTI) crude — it was almost $90 in 2022 — the price difference for a barrel of Alberta’s signature Western Canadian Select (WCS) bitumen blend is expected to shrink to $13.60 by 2026 thanks to the commencement of the Trans Mountain pipeline to the West Coast.In the same period, combined light and heavy oil production is expected to steadily rise to 4.1 million barrels per day (bpd) from 3.8 million bpd last year..“Additional pipeline capacity is poised to expand market access and bolster Alberta oil prices. There is optimism among Alberta's oil and gas producers, despite political and regulatory uncertainties from the federal government.”2024 Budget.In addition, natural gas prices are expected to nearly double to CAD$3.80 by 2027 from $2.20 last year when the LNG Canada project comes on stream at the end of this year.But it will mean a short term $2.1 billion revenue hit in 2024-25 until those projects are fully operational. Most of the shortfall is due to lower bitumen royalties that are expected to fall to $12.5 billion this year from $14.3 billion collected year.The higher figure was despite the fact oil prices came in at $76.50 per barrel compared to its $79 forecast.“While Alberta’s economic prospects remain optimistic, government revenue continues to be volatile as a significant portion is highly sensitive to global economic conditions including commodity prices, interest and exchange rates, and financial markets,” it said.“Additional pipeline capacity is poised to expand market access and bolster Alberta oil prices. There is optimism among Alberta's oil and gas producers, despite political and regulatory uncertainties from the federal government.”
