St. John's businessman Dean MacDonald says he wants a piece of Terra Nova
The owner of the Newfoundland Growlers says he's seeking up to 20% ownership stake in troubled oilfield
St. John's businessman Dean MacDonald says he's interested in becoming a partner in the troubled Terra Nova oilfield.
When reached by phone Friday, MacDonald told CBC News on Friday he's been approached by some of the oil companies involved with the Terra Nova joint venture, and that he's eager to explore the idea of acquiring an equity stake.
"At this stage we're not in, but we certainly would have an interest in participating as it moves forward," MacDonald said.
MacDonald, who declined a recorded interview, said he's open to a "significant" piece of the ownership.
"We'd be interested in up to 20 per cent of the project if it is available."
Understands the business
MacDonald owns Deacon Investments Limited, a St. John's-based private equity investment firm with holdings across a broad range of sectors in North America and the United Kingdom, including sports and recreation, real estate, technology, and oil and gas.
He also owns the ECHL's Newfoundland Growlers, a professional hockey team based at Mile One Centre in St. John's.
More recently, he made headlines for his unsuccessful efforts to purchase Mile One Centre from the City of St. John's. He was also part of an unsuccessful bid to buy the idled North Atlantic oil refinery in Placentia Bay, and is known to have made an offer to purchase the Marble Mountain ski resort near Corner Brook from the provincial government.
He's also been closely linked to the Liberal Party of Newfoundland and Labrador, and has flirted with seeking the party leadership.
He is the largest private shareholder in a company called ClearStream Energy, an oil and gas services company based in Calgary with some 3,000 employees.
Approached by an oil company
MacDonald was reluctant to provide details, but said he was approached by one of the oil companies involved with the Terra Nova joint venture as last-minute efforts were underway to reach a deal.
"We've been trying hard to make investments in this province," said MacDonald, adding that it's not uncommon for private equity firms to become involved in the late stages of an oilfield, as multinationals exit in favour of more attractive investments.
That appears to be the case with the Terra Nova, with CBC News having confirmed that four of the seven oil companies forming the joint venture, representing nearly 40 per cent of the ownership shares, have expressed a desire to exit the project.
In late May, Suncor CEO Mark Little admitted it was unlikely that all seven partners would agree on a return-to-production plan for the Terra Nova.
Little set this past Tuesday as a "brick wall" deadline for a unanimous decision on a way forward. The options are what's called an asset life extension, which would require an estimated $600 million refit of the Terra Nova, or abandonment and decommissioning of the field, which began producing in 2002 and was linked to more than 1,000 direct jobs as recently as two years ago.
In the lead-up to the deadline, the provincial government announced it had rejected an offer to buy an equity stake in the project, saying it was too risky for a province already facing a financial crisis to become involved in an end-of-life oilfield.
The Tuesday deadline passed without any news from project operator Suncor, with the industry bracing for a worst-case scenario.
But on Wednesday evening, the company announced an agreement in principle had been reached to restructure the project ownership, with an intention to sanction the asset life extension this fall.
Suncor revealed it was increasing its ownership from 38 to 48 per cent, and that some of the other owners were increasing their ownership of the project for consideration payable from the rest.
MacDonald was not part of the agreement in principle announced this week and wouldn't say how much money he's prepared to invest.
Earlier this week, Energy Minister Andrew Parsons said other parties were interested in investing in the Terra Nova. On Friday, Parsons said he was not aware that Deacon Investments was on the list of potential investors when he made that comment.
"If there is private interest and it is a Newfoundland and Labrador company, that's great," said Parsons. "But my only concern is that this life extension is sanctioned and the Terra Nova returns to production."
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