U.S. company to secure Alberta Oil Sands

An international takeover of Alberta’s oil sands is at hand according to recent statements by Bank of Montreal strategists.
The U.S. Securities and Exchange Commission is deciding whether to update the original 1970 rules on measuring oil reserves.
Under current rules, large portions of any oil sands project’s assets cannot be booked as reserves. Applying strict SEC rules would put the reserves of the oil sands at around 12 billion barrels, only a small part of the 175 billion barrels representing the correct way to calculate the size of Alberta’s bitumen resource.Operating under current SEC guidelines will result in overpayment for oil sands acquisitions. SEC rules demand that companies evaluate their reserves based on a snapshot of prices at year’s end. This provision led to last December’s massive writeoffs of oil sands reserves, as the industry was dealing with a downturn in prices for heavy oil, which is used as a proxy for the selling price of bitumen.Recently, a report was sent to the SEC recommending changes to the rules for measuring reserves, including altering the year-end rule and suggesting oil firms be allowed to include probable reserves in addition to proved reserves.The International Monetary Fund may adopt an expansive definition in measuring Canada’s oil sands reserves and will define the nation’s oil reserves as two or three times larger than those of Saudi Arabia.A spokesman for a Chicago-based investment company and BMO’s global portfolio strategist, says there will be a disappearance of the publicly traded companies once the SEC comes out with its rulings.”
Companies with existing oil sands operations are likely to be acquired by big oil companies.