Oil Sands Truth: Shut Down the Tar Sands

Petrocan CEO is on the hot seat

Petrocan CEO is on the hot seat
Andrew Willis,
February 2, 2009

Welcome to the hot seat, Ron Brenneman.

Petro-Canada's CEO faces a full-scale shareholder revolt in coming weeks, as the much-watched Ontario Teachers' Pension Plan leads a campaign for better performance from the former Crown corporation.

Mr. Brenneman must defend a strategy that's seen Petrocan build a diverse collection of assets, a number of which are yielding relatively low returns, at a time when rivals for focusing their operations.

Contrasting strategies are in place at EnCana, where CEO Randy Eresman has relentlessly pruned operations to focus on the oil sands and unconventional natural gas, or Suncor, where Rick George is all about the tar sands. Mr. Eresman and Mr. George are also known for being far more open and accessible than Mr. Brenneman, who puts the guard in guarded.

It's worth noting that other oil patch executives with a grab bag of holdings, such as former Nexen CEO Charlie Fischer, have drawn more than their share of critics in the past.

There's a sense that Petrocan feels insulated from shareholder complaints, due in part to its takeover-proof structure, and to its cultural roots as a state-owned entity. Mr. Brenneman and his team have listened to activists, but haven't done much with their recommendations. A more public campaign is now beginning, and a proxy battle that sees changes to the board of directors could be coming.

Petrocan stock has underperformed for several years, and a great many shareholders will quietly support an activist campaign from Teachers. Mr. Brenneman has his work cut out for him if he intends to defend the status quo.

http://www.theglobeandmail.com/servlet/story/RTGAM.20090202.WBstreetwise...

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