Chevron, Shell warn B.C.'s 7% LNG levy not globally competitive

• Chevron (NYSE:CVX) Royal Dutch Shell (RDS.A, RDS.B) are leading an industry pushback against the scope of British Columbia’s proposed tax on exports of liquefied natural gas, deepening an impasse over fiscal terms that has delayed final investment decisions for the sector.
• The B.C. government announced this week that profits from LNG plants will be taxed initially at 1.2% but would climb as high as 7% once companies recover the capital costs of building multi-billion-dollar export terminals.
• Chevron and Shell, which are assessing plans for export terminals to deliver B.C. gas to energy-hungry Asian markets, warn that the levy is not globally competitive.
• A 7% levy on profits works out to a $0.50/MBtu surcharge, Ziff Energy analysts say - "not a small number when you consider there's a lot of competition out there."

Comments

[rambotrader51]

This is the same game miners play all over the world, pitting one nation against the other to drive down taxes. These multinationals are of the opinion that a country's resources are all theirs because they developed them and want to pay the citizens of the country nix.

Canada is to be congratulated. Mega wealthy multinational miners need to scale back their highly overpaid CEOs and executive staff and start paying for the resource they mine.

[john001]

rambo...so what you're saying is that "Joe Citizen" should cut out the multinationals and develop the resources themselves. That sounds like progress, I guess.

[john001]

Kill the "Golden Goose" before it gets a chance to lay a golden egg. Brilliant.

[Hender]

Interesting...how much of a levy would BC put on Alberta crude if the Northern Gateweay was built?

[Michael Fitzsimmons]

Yeah, I can't believe BC implementing such a levy when it knows it has to compete against US LNG let alone other worldwide resources closer to the Asian markets Canada hopes to supply. What a blow it.