Commenting on the Syncrude project announcement by Alberta Premier Peter Lougheed, GULF OIL CANADA PRESIDENT, JERRY MCAFEE said, "We are pleased that the $55 million spent to date and the many months of negotiations have resulted in a conditional agreement. which is acceptable to both the province of Alberta and the participation companies."
He said he hoped it would prove to be a viable arrangement which could serve as the basis for the succession of large processing plants which will likely have to be built in the Alberta tar sands area during the next decade in Canada's future energy requirements are to be assured and healthy exports continued.
"In our view, the rapid development of the tar sands offers the best prospect for maintaining Canada's important oil export trade with the United States. particularly if some of the present exports of conventional crude oil are diverted to the Montreal market by Federal Government policies," Mr. McAfee said.
He added, "we are taking at face value energy Minister Donald Macdonald's assurances that oil from the tar sands will be granted free access to international markets and prices to permit an adequate return on the huge investment involved. Out under standing is that synthetic crude oil from the tar sands will be exempted from the proposed twoprice system for conventional crude oil and from any export duty that may be. imposed upon it.
"The decision to proceed with the Syncrude project is also conditional I upon receiving from Ottawa a ruling that royalties paid to the Alberta Government under the agreement will be fully tax deductible by the participating companies," Mr. McAfee said.
"We regard the profit-sharing approach in which the Province would share some of the risks as well as the profits as an imaginative and constructive solution to the royalty problem for a high-risk capital intensive project such as this.