Saskatchewan has overtaken Manitoba as the No. 1 place in Canada for oil and gas investment, based on the opinions of petroleum
executives and managers in the annual href=”http://www.fraserinstitute.org/research-news/display.aspx?id=17762”
target=”_blank” title=”Global Petroleum Survey”>Global Petroleum
Survey, released today by the Fraser Institute, a Canadian
public policy think-tank.

But Saskatchewan fell just short of finishing among the top 10
jurisdictions globally, ranking 11th overall in the survey of 136
jurisdictions. Last year, it placed second in Canada and 17th in
the world, out of 133 jurisdictions.

“Saskatchewan understands the petroleum industry and how
important it is to maintaining a prosperous economy,” said Gerry
Angevine, Fraser Institute senior economist in the Global Resource
Centre and co-author of the Global Petroleum Survey
2011.

“Industry executives stress that
long-term energy policy stability, low royalties, and clear
regulatory frameworks are their top priorities when choosing where
to invest.”

This year, Manitoba fell to second place among Canadian
provinces and territories. Ontario maintained a third-place finish,
while Nova Scotia moved up to fourth from seventh. Newfoundland and
Labrador remained in fifth place.

Alberta saw its score improve, moving up to sixth place among
Canadian jurisdictions after finishing eighth in 2010. Globally,
the province ranked 51st out of 136, compared to 60th out of 133
jurisdictions last year.

“Alberta earned better marks for fiscal terms following the
special drilling incentives that were announced in May last year,
after the 2010 survey had been completed,” Angevine said.

“But investors remain concerned about regulatory uncertainty in
Alberta, especially with regard to environmental regulations, and
the cost of regulatory compliance.”

British Columbia dropped to eighth place among the provinces and
territories after finishing sixth last year. The deterioration in
BC’s ranking resulted from poor scores for regulatory uncertainty,
cost of compliance, and environmental regulations. The province’s
score on the “taxation in general” question also deteriorated.

Among the remaining Canadian jurisdictions, New Brunswick is
ranked seventh and Quebec ninth. The Northwest Territories came in
last nationwide, in 10th place.

Nationally, the biggest jump occurred in Nova Scotia, which
vaulted to 34th  (of 136) from 53rd (of 133) while Ontario
rose to 25th from 28th. The biggest decline occurred in the
Northwest Territories, which fell to 103rd from 74th. Manitoba
dropped to 12th from eighth, BC to 69th from 52nd, and Quebec to
92nd from 77th. Newfoundland and Labrador remained in 50th place
this year while New Brunswick, which was not included in the 2010
survey, came in 59th place.

“British Columbia has the dubious
distinction of ranking among the least attractive jurisdictions in
the world in terms of land claims issues.”

The top 10 most attractive jurisdictions in the world for
investment in this year’s survey are: Mississippi, Ohio, Kansas,
Oklahoma, Texas, West Virginia, Netherlands-North Sea, Alabama,
Hungary, and North Dakota.

The least attractive jurisdictions are: Venezuela, Ecuador,
Bolivia, Iran, Kazakhstan, Uzbekistan, Democratic Republic of Congo
(Kinshasa), Iraq, Libya, and Russia.

The U.S. Offshore-Gulf of Mexico experienced one of the largest
drops in the global rankings, plummeting to 60th place overall
after finishing 11th in the 2010 survey, which was conducted before
the Deepwater Horizon oil leak.

“The decline isn’t surprising, given the greater difficulty of
obtaining drilling permits in the wake of the BP disaster,”
Angevine said.

Jurisdictions which experienced remarkable declines in their
relative attractiveness for investment this year include the
Philippines, Uganda, Brunei, Uruguay, Angola, the Democratic
Republic of the Congo (Kinshasa), Cameroon, Equatorial Guinea, and
the U.S. Offshore-Alaska.

In Uganda, unexpected changes to the taxation system signalled
the government’s lack of commitment to maintaining a stable policy
environment. This was a key factor underlying the sharp drop in
Uganda’s ranking to 123rd this year from 94th in 2010.

Also near the bottom of the list, the Democratic Republic of the
Congo (Kinshasa) saw its ranking plummet to 130th, down from 106th
last year.

“The arbitrary revocation of exploration rights from one
company, and their transfer to another party, likely shattered
whatever trust would-be investors may have had in Kinshasa and its
ability to administer petroleum industry regulations fairly,”
Angevine said.

The Global Petroleum Survey 2011 is
designed to help measure and rank the investment climate of oil-
and gas-producing regions around the world.

A total of 502 respondents completed the survey questionnaire
this year, providing sufficient data to evaluate 136 jurisdictions.
The exploration and development budgets of participating companies
account for more than 60 per cent of the annual spending on
petroleum exploration and production among international oil
companies.

“Jurisdictions with reputations for
political instability and corruption, steep royalty fees and tax
rates, inadequate infrastructure, price controls, and labour
shortages have difficulty attracting
investment.” 

“Petroleum-producing regions must offer investors competitive
tax regimes and regulatory certainty.”

The survey questionnaire sought the opinions of senior
executives and managers on a range of issues, including royalties
and other forms of petroleum production tax, taxation in general,
the cost of regulatory compliance, trade and labor regulations,
legal system fairness and transparency, and political stability,
among others.