EDMONTON — Alberta’s auditor general says oilsands giants Syncrude and Suncor are challenging their royalty deals with the province and he suggests billions of dollars are at stake.
The two oldest players in the oilsands have special royalty agreements based on the value of the tar-like bitumen they process. All other oilsands producers fall under a new tax structure that took effect in January, but Syncrude and Suncor were allowed to renegotiate their longtime deals.
The two companies are challenging the valuation of the bitumen they mine, and auditor general Fred Dunn estimates that $100 million in royalties are in question for 2009 alone. If the companies won their appeal, it would reduce the royalties they pay until 2016, and that could result in a costly legal battle that could drag on for years, said Dunn.
The auditor general also expressed dismay that the companies are disputing their royalty calculations so quickly after their new agreements with the province took effect.
Officials with Suncor did not return calls Friday and a Syncrude spokesman declined comment. Nor was provincial Energy Minister Mel Knight available for comment. But spokesman Jerry Bellikka said the ministry did not see the dispute as a major issue.
“It’s a difference in the forecasted price of bitumen for this year, based on the January prices, and a forecast for the remainder of the year,” Bellikka said. “We feel is should be the set price that was agreed upon and the company feels it should be different.”