Canada poised to sell assets

Canada’s Finance Minister Jim Flaherty, on the lookout for ways to drag down Canada’s projected C$54 billion deficit for 2010-11, might some answers in offshore Newfoundland and the Northwest Territories.

Various federal administrations have long ducked the opportunity to sell an 8.5 percent stake in the Hibernia oil project, which it acquired for C$289 million in the early 1990s, compared with the C$288 million it collected in profits in 2008-09, when oil prices were above US$100 per barrel.

In the previous year, when oil averaged US$80 per barrel the dividend was C$151 million.

But the government has pocketed more than C$1 billion in the past seven years.

Regardless of Hibernia’s limited lifespan, Newfoundland Premier Danny Williams has said his province would pay market value for the federal shares, but federal-provincial squabbling could dissuade the government of Prime Minister Stephen Harper from doing Williams any favors.

Another candidate for sale could be a one-third federal share of Imperial Oil’s Norman Wells oil field in the Northwest Territories, which paid a dividend of C$125 million last year.

Questioned on these and other holdings, Flaherty offered a coy response. “We’ve done a lot of work on that and more will be said before too long,” he said.

Flaherty said there are “substantial opportunities” for federal divestment and, he indicated, they will be realized.

—Gary Park