Energy minister to oilpatch: let's talk

Alberta's energy minister is promising to improve the relationship between Calgary's oil and gas sector and the government in Edmonton, almost a week after announcing a major climb-down in its royalties regime.

The province will set up an office of the energy department in Calgary headed by a former Ralph Klein insider that will focus on better communication with industry leaders and members of the media, Ron Liepert told about500 oil patch executives Monday at a meeting of the Canadian Association of Petroleum Producers.

"It's all about working together and creating a partnership going forward," Liepert said, adding that his deputy minister will also be spending half of histime in Calgary.

Last Thursday, the government said it will roll back the royalty rates it charges companies to develop oil and gas resources, an about-face from last year's 20 per cent hike in the rates a move that was roundly blasted in Calgary. But the province's new tax regime is the start of a new era, Liepert said Monday.

The maximum rate for conventional oil will be cut to 40 per cent of revenues from 50 per cent, and the top rate for natural gas will be cut to 36 per cent from 50 per cent.

The new ratescome aftera year-long review of the industry's competitiveness compared to other jurisdictions. The changes, effective January 2011, will see the province give up $363 million in 2012 and 2013.

The president of the Canadian Association of Petroleum Producers said the government is on the right track. Dave Collyer said the government needs to better understand the uncertainties for investors in the oil and gas industry.

"The more face to face contact you can have and the more accessibility you can have then it's going to lead to better information and hopefully at the end of the day better decisions," said Collyer.

Liepert said too much time has been wasted with industry and government disagreeing over policy, and it's time to focus on working together.

"This is not something that's going to swirl around in the bureaucracy over the next couple of years, we're actually going to address it and are going to address those issues that industry identify as being barriers to them doing as what they do best," said Liepert.

"So I think those are real positive steps in the immediate to ensure we are on the ground here in the city where the industry is located."

The new Calgary Energy Department office is scheduled to open within six months, but a communications director is already in place to liaise with industry and financial media.