By George Gill
Petro-Canada and Suncor Energy plan to merge in a common share exchange which a Bloomberg report estimated at Canadian $19.3 billion (U.S. $15.8 billion) in value. Suncor’s existing shareholders will own about 60 percent, and Petro-Canada shareholders will own 40 percent of the merged company.
The Calgary, Alberta-based companies agreed the combined entity would operate corporately and trade under the Suncor name, while continuing to use the Petro-Canada brand for refined products. Pending approvals, including compliance with Canada’s Competition Act, the companies anticipate completion of the deal in the third quarter this year.
Jon Hamilton, Petro-Canada’s director of downstream communications, noted that Suncor does not have a lubricants business. He said Petro-Canada could not speculate on how the merger might impact its lubricants and base oil businesses.
“For Petro-Canada lubricants, it’s business as usual,” Hamilton told Lube Report. “We’ll just continue to serve our customers. Once we get to the point the two companies are merged, we’ll be in position to see what that might mean. There’s a lot of time and effort that has gone into building a strong Petro-Lubricants brand, and that is respected not just by customers, but by the two companies.”
Petro-Canada bills itself as the world's largest producer of white oils and the leading supplier of factory fill automatic transmission fluids. Petro-Canada blends and packages more than 350 different lubricants, specialty fluids and greases that are exported to more than 60 countries on six continents. The lubricants include engine and gear oils, transmission and hydraulic fluids, small and marine engine oils, hydraulic and compressor fluids, heat transfer fluids, and food grade lubricants.
The company also operates a base oil plant in Mississauga, Canada, with 13,600 barrels per day of API Group II capacity and 2,000 b/d of Group III capacity.
Ron Brenneman, president and CEO of Petro-Canada, said the merger will provide “reduced capital requirements, operating efficiencies and complementary integration opportunities between upstream and downstream assets.” Brenneman will become executive vice chairman in the merged company.
Suncor’s oil sands business near Fort McMurray, Alberta, extracts and upgrades oil sands and markets refinery feedstock and diesel fuel, while operations throughout western Canada produce natural gas. It operates a refining and marketing business in Ontario with retail distribution under the Sunoco brand.
Suncor’s U.S. downstream assets include pipeline and refining operations in Colorado and Wyoming, and retail fuel sales in the Denver area under the Phillips 66 brand. Suncor is an authorized licensee of the Phillips 66 brand and markets in Colorado. Sunoco in Canada is separate and unrelated to Sunoco in the United States, where it is owned by Sunoco Inc. of Philadelphia.