No basis for claims of $50 million a day losses, says new Allan report.
By Andrew Nikiforuk, 3 Apr 2013, TheTyee.ca
Industry and government claims that Canada is losing as much as $70 million a day on bitumen exports due to “double discounts” in oil markets and a lack of pipeline capacity are untrue, says a new financial analysis.
Nor is the oil sands industry really losing money on bitumen discounts for two vital reasons, says Allan.
For starters, bitumen prices have steadily increased overtime.
And whatever revenue losses upstream oil companies might have sustained due to fickle bitumen markets, their integrated downstream refineries recouped them with what the Canadian Imperial Bank of Commerce calls “super-normal cash flows” in 2011 and 2012. Oil sand producers including Suncor, Imperial, Husky, Nexen, Canadian Natural Resources Ltd., Shell, Cenovus and Chevron all own upgraders or refineries downstream.