N.L.'s stakes in oil projects being put to potential buyers as next phase of asset review

Newfoundland and Labrador is taking its stakes in offshore oil production to potential buyers, as the third stage of a review in which the province took stock of its assets to decide what to keep and what to sell.

The province hired French multinational firm Rothschild and Co. to undertake the review of assets.

In a press release Tuesday, the government said Rothschild will be presenting the province's oil assets to a range of potential buyers to determine their true market value.

That doesn't mean they're going to sell, the release said, but it could open the doors for negotiations.

"During this phase of the review, we will be presenting our portfolio to a broad range of potential buyers and then deciding on next steps, which may include negotiating with the most credible groups," Finance Minister Siobhan Coady said in the release.

Energy Minister Andrew Parsons said the review is about determining the best play for the people of the province in the long term.

"It's like anybody who has any kind of asset. You're interested to know what the marketplace thinks," he told CBC News Tuesday.

"If we have assets, we have to consider: 'Does this sale now help us deal with situations we have now, or are we better off, you know, holding on to that?'… We think it's a good time now, but the other thing to keep in mind is that we're not bound by anything."

Equity stakes in oil projects on the table

The latest stage of the review is focused on the provincial government's 4.9 per cent equity position in Hebron, 8.7 per cent equity position in the Hibernia South extension, five per cent stake in the White Rose extension project, as well as the asset and exploration teams and intellectual property within OilCo — the Oil and Gas Corporation of Newfoundland and Labrador.

Rothschild was tasked with a broader review of all provincially owned assets, including the Newfoundland and Labrador Liquor Corporation and Marble Mountain.

The province says no decisions have been made on selling or keeping any assets to date.

Energy Minister Andrew Parsons says the review is about determining the best long-term play for the people of the province. (Peter Cowan/CBC)

The review stems from The Big Reset — a report authored by Moya Greene and the premier's economic recovery team that looked at the economic state of the province and its future options.

The report recommended selling the NLC and Marble Mountain, and waiting for the value of its equity stakes in oil projects to increase before selling those too.

"Holding oil and gas assets is not consistent with a streamlined government or a government with a high debt load," the Greene report said. "The financial risks associated with assets of this type are not consistent with the small size of this province."

WATCH I The time is right to explore selling equity stakes in oil projects, says Andrew Parsons:

Parsons said values have increased in the last three years as the market continues to recover from the COVID-19 pandemic, reiterating that discussions are only about looking at the market.

"We are only committed to seeing what is out there," he said. "We would prefer to have [Oilco] sort of bundled as a whole, but if there's interest in one part versus another, we will consider everything that comes in."

PC Leader Tony Wakeham wants the provincial government to make the Rothschild report public. (Peter Cowan/CBC)

PC Leader Tony Wakeham told CBC News he thinks the government seems to want to get out of the oil and gas industry.

"We had zero bids on a land offering of the offshore, and now we see the government turning around and signalling that they want to sell off the equity stakes that we have in major offshore projects," he said.

Wakeham added he and his party want to know how much money the government's assets are worth to help the public understand the situation — noting the Rothschild report has never been made public.

"It can't be just a fireside sale, it can't be just about, 'Let's get some money in the bank account so we can have a next election.' It's got to be about the next generation."

Parsons said he wouldn't let the PCs be involved in the sale "because they would put all the facts or the figures out there to let everyone consider and we wouldn't see a return."

"I get that there's an interest in this, but right now we are still trying to determine what that value is," he said.

"So we don't want to compromise ourself in any way. Keeping in mind, though, that there's an underlying fact that doesn't go away: the assets are owned by the people of the province, the assets are owned by government. So anything that we do will be disclosed when the time is right."

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