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Hedging Alberta Government's Oil and Gas Revenue: Is Acting Like a Farmer a Viable Strategy?
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- Author(s) / Creator(s)
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The provincial government of Alberta in Canada experiences a significant annual revenue variability arising from changes in crude oil and natural gas prices. This research evaluated whether Alberta's non-renewable revenue risk could be managed using a derivatives hedging program. Results from a historical hedging simulation approach suggested that such a program would not have been the most effective method of managing revenue risk over the period of 1995-96 to 2003-04. Total impacts of hedging would have varied from Can-$8 Billion to Can $6 Billion over this time period. These results suggest the Alberta government explore alternative methods to manage non-renewable resource revenue risk.
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- Date created
- 2009
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- Subjects / Keywords
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- Type of Item
- Report