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Petro-Canada to be protected from takeover by legislation
Gary Park Petroleum News Calgary correspondent
The Canadian government may be shedding its direct stake in Petro-Canada, but it is not ready to throw the doors open to a corporate takeover of the firm.
Legislation that prevents any other company or group of related investors from acquiring more than 20 percent of Petro-Canada’s voting stock will remain in place once the government starts unloading its final 19 percent holding in the company, a spokeswoman for the Finance Department told the Edmonton Journal.
She said Petro-Canada used taxpayers’ money to grow in the first place, adding: “Canadian taxpayers took the risk. They should also have access to the rewards. They should keep the benefit.”
But the ownership legislation sets no limits on foreign investment in Petro-Canada.
Meanwhile, Finance Minister Ralph Goodale told the House of Commons that some of the proceeds from the sale of 49.39 million government shares — currently worth about C$2.9 billion — will help finance new environmental technologies.
He said C$400 million from the divestiture will be contributed over two years to Sustainable Development Technology Canada as part of the government’s contribution of C$1 billion over the next seven years to promote new environmental technologies. Canada Hibernia stake could also be sold Goodale also said the government is not opposed to selling its 8.5 percent stake in Canada Hibernia Holding, which manages Newfoundland’s offshore Hibernia oilfield.
With Hibernia now pumping more than 200,000 barrels per day, that interest is valued at C$500 million to C$700 million.
Goodale declined to offer a time line beyond saying it’s “potentially something we could do in the future.”
He said there is no compelling reason to remain a Hibernia partner, adding “it’s a matter of making an appropriate commercial decision.”
Newfoundland Premier Danny Williams has wasted no time laying claim to the Hibernia share, formally asking the Canadian government to “return” the ownership position to his province.
Failing that, he did not rule out a Newfoundland bid for the asset if it were placed on the open market.
Williams based his argument on a 1985 Atlantic Accord that recognized the right of Newfoundland to “be the principal beneficiary of oil and gas resources off its shores, consistent with the requirement for a strong and united Canada.”
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