Alberta surplus doubles to $4.1 billion on elevated oil revenue

(Bloomberg) – Alberta more than doubled its projected budget surplus for this fiscal year to C$5.5 billion ($4.1 billion) as elevated oil prices swell government coffers with more revenue.

The Canadian province, which holds the world’s third-largest crude reserves, is benefiting from higher oil prices supported by production cuts from OPEC+ countries including Saudi Arabia and Russia. Total government revenue is projected to be C$74.3 billion for the fiscal year ending in March, nearly C$4 billion more than was forecast in the spring budget. That’s mostly due to higher oil royalties and personal and corporate taxes.

Other highlights from Alberta’s fiscal update update:

• The government projects average West Texas Intermediate oil prices of $79 a barrel in 2023-24, dropping to $73.50 by the 2025-2026 fiscal year
• Non-renewable resource revenue, mostly oil-sands royalties, is projected at C$19.7 billion in 2023-24, a C$1.3 billion increase from what was budgeted
• The discount on heavy Canadian crude is expected to shrink to around $15 a barrel in the 2024-25 fiscal year when the Trans Mountain pipeline expansion comes into service
• Investment in oil and gas extraction will grow 18% this year