| Type | Subsidiary |
|---|---|
| Industry | oil and gas industry |
| Successor | Suncor Energy |
| Founded | Ottawa, Ontario (1975) |
| Headquarters | Calgary, Alberta, Canada |
| Key people | Ron Brenneman, President & CEO |
| Production output | oil, natural gas, petrochemicals |
| Revenue | C$18.911 billion (2006) |
| Employees | 4,514 (2008)[1] |
| Parent | Suncor Energy |
| Website | www.petro-canada.ca |
Petro-Canada was a crown corporation of Canada in the field of oil and natural gas. It was headquartered in the Petro-Canada Centre in Calgary, Alberta. In August, 2009, Petro-Canada merged with Suncor Energy, a deal in which Suncor investors received approximately 60 per cent ownership of the combined company and Petro-Canada investors received approximately 40 percent. The combined company retained the Suncor Energy name for upstream operations and uses the Petro-Canada brand nationwide for downstream retail operations.
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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. 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 as a result little of the benefit of rising oil prices went to Canadians.
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 was founded as a Crown Corporation in 1975 by an act of Parliament. It started its operations on 1 January 1976. The company was given C$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 existing oil firms. Its first president was Maurice Strong. The Progressive Conservatives (PCs), then led by Albertan Joe Clark, were opponents of the company, and advocated breaking it up and selling it. However, they were unable to proceed with these plans during their brief time in power.
With the 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]
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.
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 sell its majority control, but keeping a 19% stake in the company. No other shareholder was 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 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 but many did not work in other oil companies and some left Alberta to find work elsewhere.
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]
The merger of Petro-Canada and Suncor was announced on March 23, 2009.[5] This created a company with a combined market capitalization of $43.3 billion. The merger was completed on 1 August 2009.[6]
As of 2008, Petro-Canada was Canada's 11th largest company and second-largest downstream 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) refined 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)[7] and other specialized products. All these facilities are currently run by Suncor.
At one time, the company had international operations in Algeria, the Netherlands, Tunisia, the United Kingdom, Syria, Italy, Libya, Trinidad and Tobago, Venezuela, Morocco and Norway. These sites outside of North America were run by the International and Offshore Business Unit of Petro-Canada with its headquarters in London. This was the largest business unit, and much of its assets were part of the former Veba Oel company based in Essen, Germany.
In 2006, the company entered the mobile phone market with a prepaid service called Petro-Canada Mobility.[8]
In recent years, Petro-Canada has been opening a new fast-food oriented branded convenience store called Neighbours. Many of these new stores are in the GTA with a new store slated for Stittsville in Ottawa.[9] Some of these locations include drive-thrus and the "Glide Auto Wash", a hybrid car wash allowing the customer a choice of either a soft cloth wash or a touchless wash. As of December 2011, there are 11 Glide car washes in Ontario, one Glide car wash in Alberta and 220 "SuperWash" locations from British Columbia to Quebec. Some other locations also include an A&W restaurant within its stores.
Petro-Canada is a Suncor-owned brand for retail and marketing networks of petrol and lubricants. It has a loyalty program called "Petro Points" where the customers get points for fuel, car repair and store purchases. Its main petrol/gasoline additive was Tactrol.
The company teams up with Citibank for a Petro Points MasterCard. In June 2010, CIBC said it has signed a deal to buy a $2.1-billion credit card portfolio from Citigroup’s Citibank Canada MasterCard business including the Citi Petro-Canada MasterCard (but excluding the Citi Petro-Canada personal credit card)[10].
Petro-Canada also runs a chain of car repair stations called Certigard Car Repair.
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