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Petro-Canada

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Petro-Canada
Company typePublic
IndustryOil and Gasoline
FoundedOttawa, Ontario (1975)
Defunct2009
FateAcquired by Suncor Energy
HeadquartersCanada Calgary, Alberta
Key people
Ron Brenneman, President & CEO
ProductsPetrochemical products
Revenue$18.911 billion CAN (2006)
Number of employees
4,514 (2008)[1]
ParentSuncor Energy Edit this on Wikidata
Websitewww.petro-canada.ca

Petro-Canada was a Canadian oil and gas firm. Its headquarters were in the Petro-Canada Centre in Calgary, Alberta. On August 1, 2009, Petro-Canada merged with Suncor Energy. Although the combined firm retained Suncor as its corporate name, the "Petro-Canada" brand is retained for the company's retail network (along with, for the time being, Suncor's Sunoco brand).

History

Petro-Canada was founded as a Crown Corporation in 1975 by an act of Parliament and it started its operations on 1 January 1976. With establishment of Petro-Canada, the federal government transferred its 45% stake in Panarctic Oils Ltd. and 12% in Syncrude to the newly established company. In 1976, Petro-Canada purchased Atlantic Richfield Canada, in 1978 Pacific Petroleums, and in 1981 Petrofina. Most of the original Petro-Canada refineries and service stations were acquired from British Petroleum Canada in 1983. In 1985, Petro-Canada acquired the Canadian retail stations of Gulf.[2]

In 1973, world oil prices quadrupled due to the Arab oil embargo following the Yom Kippur War. The province of Alberta had substantial oil reserves, whose extraction had long been controlled by American corporations. Elements of the government of Prime Minister Pierre Trudeau and the opposition New Democratic Party felt that these corporations geared most of their production to the American market, and sent their profits south. As a result, they believed, little of the benefit of rising oil prices went to Canadians. This view was not widely shared in the oil-producing province of Alberta.

Petro-Canada Oil

The bill to create a publicly-run oil company was introduced by the New Democratic Party in 1973, Trudeau's Liberals were then in a minority government and dependent upon the support of the NDP to stay in power. The idea also fit with Trudeau's economic nationalism. The Liberals and NDP passed the bill over the opposition of the Progressive Conservative Party led by Robert Stanfield.

Petro-Canada Headquarters in Calgary

The company was given $1.5 billion in start-up money and easy access to new sources of capital. It was set up in Calgary, despite the hostility of that city's population and existing oil firms. Its first president was Liberal operative Maurice Strong. The government maintained closer controls over Petro-Canada than was usual for a Crown Corporation so they could use it as a policy tool. The Progressive Conservatives (PCs), now led by Albertan Joe Clark, were opponents of the company, and advocated breaking it up and selling it. The Tories were unable to proceed with these plans during their brief time in power in 1979-1980, however.

The company became popular outside Alberta as a symbol of Canadian nationalism. The federal government and Petro-Canada tried to reinforce this popularity nationwide (but especially in Calgary) through its prominent sponsorship of the city's successful 1988 Winter Olympics bid. It quickly grew to be one of the largest players in the traditional oil fields of the west as well as in the oil sands and the East coast offshore oil fields.

Petro-Canada Fuel Pump

When the Liberals returned to power in 1980, energy policy was an important focus, and the sweeping National Energy Program was created. This expanded Petro-Canada, but it was detrimental to Alberta's economy. The PC government of Prime Minister Brian Mulroney (1984-1993) stopped using Petro-Canada as a policy tool, and it began to compete fully and successfully with the private sector companies.

In 1990, the government announced its intention to privatize Petro-Canada and the first shares were sold on the open market in July 1991, at $13 each. The government began to slowly privatize the company, selling its majority control, but keeping a 19% stake in the company. No other shareholder is allowed to own more than 10%, however. Also foreigners cannot control more than 25% of the company.

During the first year, the value of the shares gradually dropped to $8 as Petro-Canada suffered a huge loss of $603 million, primarily because of the devaluation of some assets. The newly-private company significantly reduced the number of properties in which it had a direct interest. It reduced its annual operating costs by $300 million and it went from a staff of close to 11,000 to only about 5,000 employees. Many of these laid off employees went on to work and start up other oil companies in Alberta creating a new group of Canadian producers.

In his 2004 federal budget, Finance Minister Ralph Goodale pledged to sell the government's remaining stake in the company and by the end of the year it had sold its 19% stake, 49 million shares in all, for net proceeds of $3.2 billion.[3] As of June 2007, the company's largest shareholders were Capital Research and Management Company (a Capital Group company), with 7.3%, and Barclays, with 4%.[4]

Merger with Suncor

The merger of Petro-Canada and Suncor was announced on March 23 2009.[5] This merger created a company with a combined market capitalization of C$43.3 billion. On 4 June, 2009, a 98% approval rate was reached by Suncor's shareholders for the acquisition of Petro-Canada and the competition bureau approved the merger on June 21, 2009.[6] The merger was completed on 1 August 2009.[7]

Products

A Petro-Canada Price Tower in Vancouver.
A Toronto Petro-Canada station in May 2008.

Petro-Canada was Canada's second-largest downstream company with refining and supply operations, retail and marketing networks, and a specialty lubricants business. It has a loyalty program called "Petro Points" where the customers get points for fuel, car repair and store purchases. This program is continued to be run by Suncor. It teamed up with Citibank for a Petro Points MasterCard. One of the benefits is 2 cents off a litre for fuel purchases and Petro Points for all purchases on the card. Petro-Canada also runs a chain of car repair stations called Certigard Car Repair.

As of 2008, Petro-Canada was Canada's 11th largest company with important interests in such projects as Hibernia, Terra Nova, and White Rose; its gas stations remained a presence in most Canadian cities. It owned refineries in Edmonton, Alberta (135,000 bpd) and Montreal, Quebec (160,000 bpd), accounting for 16% of the Canadian industry's total refining capacity. Its lubricants plant in Mississauga, Ontario (15,600 bpd) refines crude oil feedstock to produce lubricating oil-based stocks (13,600 bpd of API Group II capacity and 2,000 bpd of API Group III capacity)[8] and other specialized products.

International

The company had expanded internationally and had been involved in various countries. These had included Algeria, the Netherlands, Tunisia, the United Kingdom, Syria, Italy, Libya, Trinidad and Tobago and Venezuela.

The main assets within Petro-Canada's International and Offshore Business were East Coast Canada, United Kingdom (North Sea), Netherlands (North Sea), Libya, Syria and Trinidad and Tobago. The Danish assets were sold off. These and all the other sites outside of North America were run by the International and Offshore Business Unit of Petro-Canada with its headquarters in 1 London Bridge, London. This was the largest business unit, and much of its assets were part of the former Veba Oel company based in Essen, Germany.

Petro-Canada also carried out exploration activities in Morocco and Norway.

Its main gasoline additive was Tactrol.

In 2006, the company entered the mobile phone market with a prepaid service called Petro-Canada Mobility.

See also

Wikimedia Commons has media related to Petro-Canada.

References

  1. ^ a b "Company Profile for Petro-Canada (PCZ)". Retrieved 2008-10-09.
  2. ^ Stanbury, W.T.; Thompson, Fred. (1982). Regulatory reform in Canada. Institute for Research on Public Policy. pp. 67–68. ISBN 9780920380710. Retrieved 2009-08-16.
  3. ^ Petro-Canada.ca
  4. ^ Yahoo Finance
  5. ^ "Suncor, Petro-Canada announce merger". CBC News. 2009-03-23. Retrieved 2009-12-08.
  6. ^ "Suncor shareholders add support to Petrocan deal". CTV News. 2009-06-04. Retrieved 2009-12-08.
  7. ^ "Competition Bureau OK's Suncor, Petro-Canada merger". CBC News. 2009-07-21. Retrieved 2009-12-08.
  8. ^ http://www.imakenews.com/lng/e_article001391043.cfm?x=bflhfJ2,bdn876k
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Official Corporate Homepage

Retail

Lubricants

Suncor Petro-Canada Homepage

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