02 March 2010

Oil production figures

BP gave you the numbers in November 2009.

Turns out the provincial finance department’s statistics division did a run of the same figures in October but didn’t make them public until January 2010, three months later.

Still, they projected oil production over the whole fiscal year would be down 21% from the previous year. They changed the exact numbers from 98 million barrels forecast in March to 101 million barrels by December and – in true political hyper-torque mode -  in the December financial update this was pushed an an increase compared to the forecast.

It was – obviously -  an increase compared to the forecast; but that only masked the fact they were actually forecasting a drop of 21% in production regardless of how you looked at it.

That, almost inevitably, will translate into a substantial drop in revenue as well.  Yet,  the December financial statement claimed there’d be only a modest drop in oil revenue from the blockbuster year in 2008.  The finance officials never did show how they came up with that calculation.

The BP forecast for revenues used used actual royalty figures from the federal natural resources department. They show the provincial government’s royalties tracking below the March forecast.

And while the treasury will pocket close to $200 million from the Hibernia transportation dispute settlement it’s still a bit hard to see how oil prices are going to rebound sufficiently to produce the extra $520 million in oil revenues – compared to March’s forecast  -  that the revised treasury forecast said would be in hand by the end of the year.

Still, the final tally on the budget update in December only shift the figures around slightly.  If it holds on track, the provincial government will still wind up borrowing close on a billion dollars in cash – either from the banks or from its own temporary cash reserves – in order to balance the books.