CALGARY — The CEO of Cenovus Energy Inc. says a pending sale of Husky Energy Inc.’s chain of retail fuel stations was halted as part of the $3.8-billion all-stock takeover that closed early this year.
In a fireside chat at the 2021 Scotiabank CAPP Energy Symposium, Alex Pourbaix says the sale would have taken place at a low point in the fuel retailing cycle and was stopped in hopes that the market for those assets would improve.
Husky announced its plan to get out of retailing fuel to consumers after 80 years in the business in early 2019, putting on the block more than 500 service stations, travel centres, cardlock operations and bulk distribution facilities from British Columbia to New Brunswick.
It struck a deal to sell its 12,000-barrel-per-day refinery in Prince George, B.C., in late 2019 but couldn’t find a buyer for the rest of the assets.
Higher oil prices will allow Cenovus to reach its debt reduction target of $10 billion by year-end, removing the need to sell assets, but Pourbaix said the company is continuing to sort its operations into core and non-core buckets.
He says Husky’s Asian-Pacific assets are also being assessed and are “not necessarily” going to be considered a core asset going forward. Husky has offshore natural gas projects with Chinese partner CNOOC Ltd. in China and Indonesia.
“The retail business, you know, it’s a great asset position of legacy Husky. We stopped that sale at the time of the deal; they were pretty advanced,” said Pourbaix on a symposium webcast.
“From my perspective, they were trying to sell at, really, what was the very bottom of the market. I just wanted to take the time to go back and reassess, did a sale really make sense and if it makes sense, is there a better time to sell? And we’re probably moving into a lot better market.”
Pourbaix predicted that vaccine rollouts and an economic recovery in North America suggest the upcoming driving season could be “off the charts,” a promising prospect for the sale and also for refinery assets it purchased in the Husky deal.
This report by The Canadian Press was first published April 6, 2021.
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