IN THE NEWS / Petro-Canada Sells 'Red Square'
By CLAUDIA CATTANEO
The Financial Post
Petro-Canada has sold for $200-million its interest in Petro-Canada Centre. Its
red-brick headquarters in the city's core was derided as "Red Square" in the 1980s by
oil workers angry at the federal government's controversial National Energy Program.
The oil and gas company said yesterday the sale of its 50% interest to a subsidiary of
Toronto-based Gentra Inc. will result in a $12-million profit and reduce long-term debt
by $140 million.
Petro-Canada, which moved into the building upon its completion in 1984, will
continue to occupy the tallest of the centre's two towers.
The major tenant in the second tower is TransCanada PipeLines Ltd., which plans to
move to new headquarters being built across the street.
Petro-Canada, still 18% owned by federal taxpayers, was established by Pierre
Trudeau's Liberal Government in 1975 to provide a window on the oil patch and
encourage the Canadianization of the energy sector following the 1973 Arab oil
embargo.
The same thinking motivated the establishment of the National Energy Program in
1980, which pushed Alberta into a recession by curtailing oil industry spending by
foreign firms. It was scrapped in the mid-1980s by Brian Mulroney's Tories.
"There was never any love lost between the industry in those days and
Petro-Canada," said Ian Doig, the bombastic editor of Doig's Digest, an influential oil
industry newsletter.
"Petro-Canada was a company owned by the state inside a red building."
The name Red Square stuck as its lead tenant became synonymous with government
inefficiency and fat, as personified by the extravagant spending habits and luxurious
lifestyle of its former leader, Bill Hopper.
"At least he knew an oilwell from a grain elevator. It could have been run by defeated
politicians," said Mr. Doig.
Petro-Canada Centre's remaining interest is held by ARCI Ltd., a Canadian holding
company for the European D'Arenberg family.
The sale of Red Square marks another major passage for the new Petro-Canada
under the leadership of president and chief executive Jim Stanford, who increased the
company's competitiveness by axing thousands of workers, selling off non-core assets,
paying down debt, and building megaprojects like Hibernia and the oil sands. |
