The Narwhal dug into the financial statements of the five biggest oil companies operating in Alberta to get a sense of how they’re really faring. Despite the ‘tough times,’ their CEOs are still taking home millions annually — including generous bonuses
Albertans have heard it time and time again: it’s a tough time for the province’s oil and gas industry.
There are the suggestions from the prime minister that Alberta is in “crisis” as a result of low energy prices. The country’s natural resources minister has weighed in too, noting that “Alberta hurts.” There are headlines declaring “tough times” for oil producers and warning that the Alberta government is on a path toward “fiscal disaster.”
With so many gloomy headlines, one would be forgiven for thinking that the major oil companies operating in the province — the so-called ‘Big Five’ — are hurting, too.
But are they?
In November, the Edmonton-based Parkland Institute released a reportthat suggested the opposite.
The Big Five, which the report says control 79.3 per cent of Canada’s productive capacity of bitumen, are still posting profits, and in some cases they’re sizeable — with profit margins of upward of 13 per cent, according to the Parkland Institute.
In Canada, the Big Five are Suncor Energy, CNRL, Cenovus, Imperial Oil and Husky Energy.
The report compares the Big Five’s gross profits with the government of Alberta’s income for 2017, which was $47.3 billion. According to Parkland’s analysis, the Big Five, taken together, brought in almost the same amount in aggregate profits in 2017 — $46.6 billion.
Alberta’s income for the whole province is roughly equivalent to the total profits of the five largest energy companies, according to Parkland’s calculations.
The Parkland report pointed out that, “in 2016, the average profit margin for all industries in Canada was 7.8 per cent. Three of the Big Five — Suncor, Cenovus and CNRL — had net profit rates above 13.5 per cent in 2017, and Cenovus’s profit margin was an impressive 19.4%.”
Parkland suggests that the profit margins for some of the country’s largest energy companies far exceed that of the majority of other businesses. MORE