Canada ponders future of Petro-Canada, Hibernia

Gary Park

Petroleum News Calgary correspondent

To sell or not to sell — the question is swirling around the new Canadian government’s stakes in Petro-Canada and the Hibernia oilfield offshore Newfoundland.

Finance Minister Ralph Goodale said Jan. 16 that no decision has been made on either holding, but the government is ready to act “when we think the time is right to gain the maximum Canadian advantage.”

He told reporters that the government has never regarded the future of the two assets as a “public policy issue ... this is a commercial issue, an economic issue.”

Natural Resources Minister John Efford, a former cabinet minister in Newfoundland, said he plans to discuss the Hibernia file with Prime Minister Paul Martin.

The 8.5 percent interest gives the government 13,000 barrels of oil per day, or US$118 million a year if oil averages US$30 per barrel.

Among analysts, that means the asset is worth in the range of C$500 million to C$700 million and would be a less controversial decision than unloading the 19 percent stake in Petro-Canada, which was created in 1975 as a wholly state-owned company to protect Canada’s energy supplies.

The 49.4 million shares would fetch about C$3.2 billion at current stock prices, less the book value of about C$600 million.

Goodale said the government is taking a “lot of very good advice from internally and externally” on Petro-Canada, “but no decision has been made and I wouldn’t want anyone to speculate about that.”

He also noted that if he were to speculate “that would influence the timing of our decision (and) I would be improperly interfering in the marketplace.”

However, Goodale has earlier said the government could make a decision in the “short term” to sell.