Succession or hard times? Motive behind possible sale of Irving Oil stumps industry watchers
CBC
Irving Oil's motives remain a mystery to many industry watchers, including David Campbell, an economic development consultant and a former chief economist for the New Brunswick government.
On Wednesday, the Saint John-based company announced a strategic review that would contemplate a "full or partial sale."
Campbell said the announcement was "kind of strange."
He said privately held companies such as Irving Oil have to conduct strategic reviews "on a regular basis, so to announce it sounded a little out of the ordinary."
With such a tight-lipped privately held company, Campbell said he has "no idea what the motivation would be" to raise the spectre of a sale, but he has a hunch.
"We do know that over the next 20 or 30 years, there's going to be less oil refined, and so they need to figure out strategically what their role is."
With all the uncertainty around refining, perhaps they want to get out while the going's good, said Campbell.
And they may want to use the capital built up in the company for another venture.
"One of the options that many of us were hoping they would do is deploy that capital in other energy-related sectors like hydrogen … [or] other new energy-related opportunities, and maybe they still would do that."
Because of the size of Irving Oil and the hefty price tag that it will command, Campbell said potential buyers are likely not going to be Canadian-based.
Irving Oil has about 4,000 employees and operates Canada's largest refinery, which processes 320,000 barrels a day.
Such a sale, he said, would have ripple effects throughout New Brunswick's economy. First of all, any outside buyer would likely move the head office, which means a loss of all of those jobs.
"So you remember what happened to NBTel in Saint John? That's exactly what's going to happen with Irving Oil — that all of the head office jobs, back office jobs, the support jobs, the supply chain, almost all of that disappears."
Founded in 1888, the New Brunswick Telephone Company was based in Saint John until it merged with other communications companies in Atlantic Canada in 1999. It's now known as Bell Aliant and is headquartered in Halifax.
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