Auditor general says Alberta oilsands giants challenging billions in royalties

Alberta’s auditor general says Syncrude and Suncor are challenging their royalty deals with the province and billions of dollars are at stake.

EDMONTON — Alberta’s auditor general says Syncrude and Suncor are challenging their royalty deals with the province and billions of dollars are at stake.

The two oldest players in the oilsands have special royalty agreements that are based on the value of the tar-like bitumen they process.

All other oilsands producers fall under the new tax structure that took effect in January, but Syncrude and Suncor were allowed to renegotiate their longtime royalty agreements.

Now they are challenging the valuation of bitumen and the auditor general says $100 million in royalties are at stake for 2009 alone.

Fred Dunn says if the companies win their appeal, it would reduce the royalties they pay until 2016.

Dunn says there are billions of dollars in royalties at stake and there could be a costly legal battle that could drag on for years.

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