High prices and better royalty rates on Hibernia didn’t offset oil production declines in September for the Newfoundland and Labrador offshore.
That’s only 40% of the $105 million monthly average needed to meet projections in the spring budget. The provincial government forecast oil royalties of $1.262 billion for Fiscal 2009, or about $105 million per month.
As reported in November, figures obtained from Natural Resources Canada showed provincial oil royalties were down almost 60% [on average] so far in 2009 compared to 2008 and were running [on average] 15% below provincial budget forecasts released in March of 2009. [In September alone, revenues dropped to 40% of the average needed to meet 2009 budget projections]
Oil production is down about 29% from last year. September oil production from Hibernia, Terra Nova and White Rose totalled 6,164, 839 barrels of light crude according to the offshore regulatory board. October production was slightly more than 6.9 million barrels, about the same as May 2009 and continuing the trend thus far for the new year.
If those trends continue for the rest of the fiscal year, oil royalties for 2009 will come in at less than $1.0 billion. Without cuts to spending or increased revenue from other sources, the provincial government will have a hard time not to exceed its record forecast deficit of $1.3 billion on a cash basis.
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[Words and a sentence added for clarity]