Economic Contribution
As operator of the world’s largest integrated oil sands mining and bitumen upgrading
facilities, Syncrude is helping to secure Canada’s energy future and has a long and
proud history of contributing to the economic well being of Canadians through
the provision of employment, the payment of royalties, corporate, property and
payroll taxes and the procurement of goods and services.
Syncrude’s newly expanded production capacity, post Stage 3 start-up, will
represent about 20 per cent of Canada’s domestic crude oil needs. Our long life, high
quality resource base, stable regulatory regime and competitive taxation environment
provide our joint venture participants with a sound platform for continued growth.
Capital investment and research initiatives focus on the best of new technologies that
promise lower emissions, lower operating and capital costs per barrel, improved energy
efficiency, more efficient water use, and the development of higher quality, cleaner
burning crude oil products.
Syncrude continues to be a major engine of growth for the Alberta and Canadian
economies with over $4.7 billion in total spending during 2005. Approximately 4,300
employees and 1,500 contractors support current operations. Our Stage 3 expansion
project created an estimated 43 million field hours of work.
Syncrude’s direct spending in Alberta also translates into economic benefits
outside the province. A 2005 study by the Canadian Energy Research Institute
indicates that the effect on gross domestic product of oil sands industry spending is
felt 72 per cent in Alberta, 17 per cent in other parts of Canada, and 11 per cent
outside of Canada.
2005 Economic Indicators
Since start-up in 1978, Syncrude
has made payments in excess of
$6.6 billion to governments for
royalties, payroll and municipal taxes
and other Crown charges. Royalties
paid to the Province of Alberta by
Syncrude’s joint venture participants
over this period amounted to over
$3.2 billion. In 2005, total payments
to governments were $281 million,
compared with $253 million in 2004.
Geographic Distribution of Economic Contribution
Overall benefits to the Alberta economy
exceeded $4.1 billion, including more
than $2.9 billion in non-energy
procurement. Business volume with
Edmonton area companies was
approximately $1,395 million, while
business with other Alberta firms totalled
a further $690 million. Companies in
other parts of Canada received business
in excess of $480 million, and contracts
with international suppliers were valued
at $122 million.
Businesses in Syncrude’s
immediate trading area, the Wood
Buffalo region of Alberta, received
$1,397 million in contracts during
the year,  about 30 per cent of total
procurement. This includes $134 million
in business with Aboriginal firms in
the Wood Buffalo area, an increase
of 25 per cent over 2004.
The majority of Syncrude’s 4,327
employees reside in the Wood Buffalo
region. Their support of local businesses,
combined with Syncrude’s procurement
of goods and services from local and
Aboriginal firms, support the economic
base of the region.
Payment of Royalties to Increase in 2006
Syncrude’s current expansion project was enabled in part by the new oil sands
fiscal regime that was implemented by the Alberta government in 1996. Under this
arrangement, a minimum one per cent royalty is paid until project capital costs have
been recovered.
Recent high crude oil prices have greatly accelerated the recovery of capital costs
by Syncrude’s joint venture participants and, as a result, the minimum royalty period is
expected to end at approximately the same time Syncrude’s Stage 3 expansion project
becomes operational in 2006. At that time, royalty payments to the Province of Alberta
will return to 25 per cent of deemed net income, similar to the basis on which they
were paid by Syncrude prior to the Stage 3 expansion.
|
symbol.
