N.L. signals renewed interest in buying feds’ share of Hibernia

James
James McLeod
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Premier Kathy Dunderdale said she’s definitely interested in buying the federal government’s equity stake in the Hibernia oil development, but only “if the price is right.”
On Tuesday, federal Finance Minister Jim Flaherty said that he’d be willing to look at selling the 8.5 per cent stake in Hibernia.

Premier Kathy Dunderdale speaks to reporters outside the House of Assembly Wednesday afternoon. Dunderdale said that she’s going to take another shot at buying the federal government’s equity stake in the Hibernia project, but only at the right price. — Photo by James McLeod/The Telegram

“It would be an expensive buy, but you can imagine the return on investment would be very significant as well,” Dunderdale told reporters Wednesday.

The Hibernia stake has been of interest to the provincial Tories for years, but they’ve never managed to get Ottawa to agree to a deal.

Then premier Danny Williams suggested back in 2008 that Prime Minister Stephen Harper turn over the equity stake to the province; at the time, the federal government said that it would only sell it at fair market value.

Then, in 2009, Dunderdale wrote to the federal government — she was natural resources minister at the time — asking for a deal on the equity stake.

At the time, Flaherty made it sound like that was unlikely to happen.

“Canadian taxpayers have in-curred significant costs to develop the Hibernia project and assumed significant risks,” Flaherty wrote in 2009.

“In this context, the federal government will manage this investment in order to maximize its value to all Canadians, and in accordance with best commercial practices.”

The issue reared its head again in the 2011 federal election. Dunderdale, who was premier by that point, wrote all three political parties asking them a series of questions relevant to Newfoundland and Labrador.

At that time, all three parties said they’d look at it.

Harper wrote: “A re-elected Conservative Government will promptly make our minister of finance available to meet with your representative in order to further review the possible sale to the province of the federal government’s ownership share of, and working interest in, the Hibernia project.”

More than two years later, nothing has happened.

Dunderdale said there was a fundamental gap in how Ottawa values the 8.5 per cent equity stake and how the provincial government values it, which is why the talks broke down.

But she said she’s encouraged to hear this week that Flaherty is still open to talking.

Both opposition parties said they support the province going after the Hibernia stake, although New Democrat Leader Lorraine Michael said that the government shouldn’t pay fair market value for it.

“It’s our resource; it’s the resource off our shores, and you know, one can dream and say, really, the federal government should be turning it over to us,” she said.

Liberal natural resources critic Dwight Ball said he also supports the idea of the province buying the stake in Hibernia, but he doesn’t believe Dunderdale can get it done.

“If this deal makes sense, this is something that can be done,” he said. “But again, I think the big question is, do the people of this province, right now, have the confidence in this government to pull this off?”

 

jmcleod@thetelegram.com

Twitter: TelegramJames

Organizations: Hibernia

Geographic location: Ottawa

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Recent comments

  • Israt Khan
    November 16, 2013 - 10:21

    Oil prices are dropping. Future Price will not be enough supportive for the province. We should wait 3-4 years more. A big recession is coming again. We have to wait until that.

  • david
    November 14, 2013 - 10:17

    "New Democrat Leader Lorraine Michael said that the government shouldn’t pay fair market value for it." Notwithstanding that there are many reasons why Newfoundland should be extremely cautious, if not downright suspicious of being duped and left holding a financially ruinous bill of goods on this (per our streak since confederation), this is the singlemost stupid comment from a senior representative of the socialist party that I have heard in recent memory. Beyond illustrating her complete lack of economic clue, her comments are an embarrassment. They do nothing short of illustrating the precise reason why we must not even engage in such discussions.

  • brett
    November 14, 2013 - 09:27

    "Both opposition parties said they support the province going after the Hibernia stake, although New Democrat Leader Lorraine Michael said that the government shouldn’t pay fair market value for it." Well it doesn't make sense for the Canadian Government to sell it at a significant discount and screw the rest of the country now does it? Thanks for the input Ms. Michaels. A fair trade is a fair trade. Flaherty can manage to sell the stake and get to a surplus position in 2015, then maybe it makes sense for them to sell it, but other than that, the stake is a cash cow and I don't really see why anyone would give up an investment like that for the prospect of having fewer opportunities. You'd better hope you have oil prices marked correctly for the future years.

    • Chantal
      November 14, 2013 - 12:02

      Yes David. And Kathy said essentially the same thing.

  • Layoff Some More Bureaucrats
    November 14, 2013 - 09:12

    Get rid of some more bureaucrats and political staffers to help pay for those shares Premier.

  • Robb
    November 14, 2013 - 08:51

    You go premier....and pay no attention to the partisan doomsday freaks....we have the oil and we should definitely be in the oil business. So if the naysayers give you some cock and bull story about a half a glass, tell them how many more years that Hibernia will be pumping oil. And certainly, when you look at it logically, this gov't has done a great job of managing our resources...quite unlike the give-away years of the liberals. But the opposition cannot have you look at anything logically, so they throw up the smoke and mirrors crap, anything to take people's minds off the good things...I mean, no inspections for the Santa Claus Parade..??..OMG...and the opposition would have you all believe that the gov't is sinking the province..??..silly thinking from a silly bunch.

    • Chantal
      November 14, 2013 - 09:32

      Err, if you had bothered to read the article, you would see that both opposition parties support the move. As for resource give-aways, one needn't look much further than our own federal Tories.

  • Charles
    November 14, 2013 - 05:32

    Yes premier, just as will finishing sinking the province, Now the glass is half full, the fed want to sell. Tell me do the people get to have say in this one? or is full speed ahead?