Wave of billion-dollar oilpatch deals a sign of bullish Canadian energy sector
BNN Bloomberg
A wave of high-profile mergers and acquisitions in the Canadian oilpatch is a sign of an industry that is flush with cash and increasingly confident in the short- and medium-term outlook for fossil fuels, experts say.
Since the start of the year, there have been a number of billion-dollar-plus deals struck in the Canadian energy sector, including Crescent Point Energy Corp.'s $1.7-billion purchase of Spartan Delta Corp.'s Montney oilfield assets, ConocoPhillips' approximately $4-billion purchase of TotalEnergies' Surmont oilsands project, and Suncor Energy Inc.'s $1.47-billion acquisition of Total's stake in the Fort Hills oilsands mine.
The latest headline-grabbing deal was announced Monday, when Tourmaline Oil Corp. — Canada's largest natural gas producer — said it would purchase privately held Bonavista Energy Corp. for $1.45 billion.
Strathcona Resources Ltd. also recently merged with Pipestone Energy Corp. in an all-stock deal, with the merged company expected to be the fifth largest oil producer in the country.
Canadian and U.S. stock markets gained ground on Wednesday as oil prices fell and tech stocks rose on both sides of the border.
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Daily oil exports from the Middle Eastern Gulf, home to top exporter Saudi Arabia and other major producers, have dropped by at least 60 per cent in the week to March 15 compared to February due to disruptions and output cuts amid the U.S.-Iran war, according to shipping data and Reuters calculations.
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Member countries of the International Energy Agency could release more oil into the market later “as and if needed” after they have already agreed the largest-ever reserve release, Executive Director Fatih Birol said on Monday.
Oil prices are down, and stocks are up Monday, though such moves have been quick to reverse since the war in Iran began.
Statistics Canada says the annual rate of inflation dipped below two per cent in February as the end of last year’s federal “tax holiday” helped take some steam out of the yearly price comparisons.
Middle Eastern sovereign wealth funds and state-backed companies are unlikely to scale back renewable energy investments in Africa despite disruptions from the Iran war, analysts say, given the strong long-term economic and strategic reasons driving such funding.
Crude oil stayed above US$100 a barrel on Monday and Gulf countries reported more attacks by Iran as the war entered its third week, while share prices were mixed.
Representatives from Beijing and Washington began their economic and trade talks in Paris on Sunday, Chinese official news agency Xinhua reported.
The impact of the Iran war on fuel prices in Canada may encourage more drivers to go electric, some experts say, but others warn the conflict will drive up prices of "pretty much everything."
