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Bloomberg: Shell Wants Long-Term Stability for Canadian Oil Investments

By Fred Pals

Oct. 25 (Bloomberg) — Royal Dutch Shell Plc, Europe’s largest oil company by market value, said long-term fiscal stability is needed before it makes further investment decisions on its oil sands project in Canada.

A government-appointed panel last month recommended Alberta increase oil and natural-gas royalties and impose a new tax on tar- sands developments to boost government revenue by 20 percent, or about C$2 billion ($2.1 billion) annually. The report suggested the changes apply to all projects, without exemptions.

“It is clear that if we’re aiming to invest a significant part, on the longer run we then expect fiscal stability,” Peter Voser, Shell’s chief financial officer, said in a conference call with analysts today. He declined to specify the amount of investment it may have allocated for the project.

Shell aims to “rejuvenate” production through unconventional projects including a gas-to-liquids venture in Qatar and oil sands fields in Canada. Shell aims to raise long-term production at its Athabasca Oil Sands Project in northeast Alberta to 770,000 barrels a day from 155,000 barrels.

Alberta, the supplier of about 10 percent of U.S. oil needs, will give oil and natural-gas producers time to adjust to new royalties, Premier Ed Stelmach said yesterday in a televised speech. The royalties’ revisions are scheduled to be announced later today.

Alberta’s tar sands may contain the most oil after Saudi Arabia, according to the Canadian Association of Petroleum Producers.

To contact the reporter on this story: Fred Pals in Amsterdam at [email protected]

Last Updated: October 25, 2007 11:12 EDT

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