Alberta hopes to reap benefits as world focuses on Suncor-Petrocan
By Carrie Tait, Financial Post
May 30, 2009
Mega-mergers quickly catch the attention of investors around the globe, and the proposed deal between Suncor Energy Inc. and Petro-Canadais no exception. Mel Knight, Alberta's Energy Minister, right, hopes the province can capitalize on the increased interest international investors are showing in the two Canadian energy companies right now. "It is a confidence thing. I think that it helps build confidence in the investment community when they look at Alberta," Mr. Knight said in an interview yesterday. "And the investment community is global with respect to these issues." Further, he hopes it will make clueless outsiders realize Alberta is more than just oil sands. "I think that the confidence that will be displayed by [the merged] company is not just related and focused to oil sands. It goes across the spectrum."
Greg Stringham, vice-president of the Canadian Association of Petroleum Producers, said the deal highlights how energy companies get by when oil prices drop and times get tough. "From an industry perspective, it shows that these companies can and do grow and will position themselves so they are ready to take advantage of the opportunities that we see coming out of this," he said. While the proposed merger, expected to close in the fourth quarter and still in need of shareholder approval and a thumbs-up from the Competition Bureau, will do little to change Canada's role on the global energy stage, it will tinker with the landscape of the domestic oil patch. "Companies do merge, and that's how they end up surviving and specializing in the niches. Small companies merge into mid-sized, mid-sized into large, and even large into the multinational size," he said. "Then, as we see normally, they spin off non-core assets and some of the other management teams around town pick it up and start specializing in those areas. It really is part of the life cycle of an industry. It is part of how we thrive."
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