CPP invests $250M in oilsands
Federal pension plan buys 17 per cent of Laricina Energy Ltd.
July 6, 2010
CBC News
The Canada Pension Plan Investment Board has paid $250 million for a stake in a small Alberta oilsands firm.
On Tuesday, Canada's largest pension plan purchased 8,333,333 shares in Laricina Energy Ltd. for $30 per share in a private placement. After the sale, CPP will own 17 per cent of the energy company.
"The investment is a very important endorsement for Laricina, and we are excited CPPIB has shown confidence in Laricina’s management team and development strategy," Laricina president Glen Schmidt said.
"We are pleased to be making an investment that we believe will deliver attractive returns over the long term," said Andre Bourbonnais, CPPIB's vice-president of private investments.
Laricina, formed in the sale of Deer Creek Energy Ltd. in 2005, will use the proceeds to fund development of its Germain project in the West Athabasca Oil Sands region, roughly 130 kilometres southwest of Fort McMurray, Alta.
Though not currently commercially active, the project is expected to process 5,000 barrels of bitumen per day.
Greenpeace slams investment
"With financing in place, Laricina will begin ordering equipment and prepare for construction in the first quarter of 2011," the company said in a release.
Mike Hudema, a spokesman for environmental group Greenpeace, criticized the CPPIB for investing in "one of the most destructive industries on the planet."
"CPP's investment in the tar sands involves pensioners in a toxic legacy when they should be able to rely on an ethical, sustainable retirement plan," he said in a statement.
The CPPIB manages the pension assets of 17 million Canadians. At the end of March, the fund held $127.6 billion in assets, of which $22.8 billion was invested in private investments.
http://www.cbc.ca/canada/edmonton/story/2010/07/06/cpp-laricina-tar-sand...
