Around the same time of the Trust Smackdown in Canada, in October 2006, Imperial Oil (AMEX: IMO) was named the operator of the Syncrude Project. As we know, IMO is the second largest holder of Syncrude after COS, with a 25% stake.
Given the Trust legislation hiatus until 2011, I then began to look over the various Trusts, and conjecture who might buy them, were they not to revert to corporate status on their own. I decided in the case of COS, that IMO was the natural buyer.
Of course, I have long felt that XOM should buy out the rest of IMO that it doesn't already own. RDS of course came along and followed such a script, with the Shell Canada buyout. But as I listened to Rex Tillerson explain on TV last month his 4 year capital spending plan, I thought, this guy is really kidding himself if he thinks it's better to explore, develop, and prove up--to the exclusion of purchasing the reserves outright.
There was a rumor going around about 2 months ago that XOM was going to buy OXY. Regardless, I think XOM will have to bite the bullet and buy somebody. Taking up the remainder of IMO, either before or after IMO takes out COS, would make alot of sense for all three entities. Finally, one adds to this the recent developments on how the SEC may allow the booking of Oil Sands reserves.
I continue to hold alot of COS and IMO, in addition to everything else.
Gregor |
