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The results of the 4th annual Global Petroleum Survey are in. 

The Fraser Institute’s survey of 645 senior petroleum industry executives and managers ranks 133 jurisdictions according to the barriers they present to investment in petroleum and gas exploration.

This year, the top-ranked jurisdiction — i.e. the one which presented the fewest barriers to investment — was South Dakota.

In Canada, Manitoba ranked eighth overall and first in the country.

The survey ranks jurisdictions according to 17 criteria which can impede petroleum and gas exploration. This includes the level of taxes and royalties; the severity of regulatory schemes; security threats; and political stability.

Among the Canadian provinces, the jurisdiction with the second lowest barriers to investment in petroleum and gas exploration was Saskatchewan, followed by Ontario, the Yukon, and Newfoundland and Labrador.

According to Gerry Angevine, a Fraser Institute senior economist and co-author of the report, “Manitoba continues to attract investment through low royalties and an easy to understand regulatory framework.”

Of the 10 jurisdictions ranked by the survey in Canada, the barriers to investment in petroleum and gas exploration in Alberta were considered to be the eighth highest in the country. Overall, the province was higher than 59 of the 133 jurisdictions, both domestic and
international.

This comparatively weak ranking stems from the fact that many companies responded to the sharp rise in Alberta’s oil and gas royalties in 2009 by shifting a larger portion of their exploration and development budgets to other jurisdictions.

Moreover, this trend persisted despite more recent attempts by the Alberta government to fix the problem.

In 2010, the 10 least attractive jurisdictions in the world for investment in petroleum and gas exploration were: Bolivia, Venezuela, Russia, Ukraine, Iran, Turkmenistan, Ecuador, Nigeria, Iraq and Kazakhstan.

It is worth noting that this survey was carried out before the major oil spill in the Gulf of Mexico.

This being said, there is little doubt that the significant increase in uncertainty associated with U.S. offshore oil exploration in general, and the Gulf of Mexico in particular, will probably cause the region’s ranking to deteriorate sharply from its current position at 11th.

Source: Reed Construction Data

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