The top story out of the 2018 provincial budget was the surprise announcement of a new oil and gas Crown corporation.
The plan was to take the oil and gas arm of Nalcor out of the existing structure, leaving Nalcor to deal with regulated and non-regulated hydroelectric operations.
To date, not even the name of the new Crown corporation has been announced.
Natural Resources Minister Siobhan Coady declined an interview request for any updates. Her office instead supplied the following response:
“Government continues to progress work towards the establishment of the oil and gas subsidiary of Nalcor Energy as a stand-alone Crown corporation,” read the statement.
“Considerable due diligence and planning is required to ensure all legislative, financial and operational considerations have been reviewed in advance of what is required to establish a stand-alone Crown corporation.”
An access to information request received in August 2018 noted that work on finding the new name for the “OilCo” had begun in January 2018. Still, there’s no new public information to speak of.
An interview request with current Nalcor Oil and Gas executive vice-president Jim Keating was passed over to the Department of Natural Resources for its comment.
Another interview request with Newfoundland and Labrador Oil and Gas Industry Association (NOIA) CEO Charlene Johnson also returned a written statement:
“There is no issue for Noia with the delay,” wrote spokesman Ken Morrissey.
“We continue to have a positive relationship with Nalcor Oil & Gas and the Department of Natural Resources and expect this to continue with the new entity.”
It’s conceivable that the delay is associated with the ongoing review of the Atlantic Accord, given the potential implications of a reconfigured Accord on the province’s offshore oil and gas sector. Without formal comment from any of the players involved, there’s only speculation to go on.
In its interim report to the Board of Commissioners of Public Utilities (PUB) on rate mitigation options, independent reviewer Liberty Consulting essentially stated it expects Nalcor to divest its oil and gas operations “in the very near term.”
Liberty also gave a picture of what Nalcor would look like whenever the new oil and gas corporation is formed.
“Divesting the oil and gas business will leave Nalcor with essentially one business — but one that it has split in two. These two arms conduct similar businesses, but separated between what has been determined to date to be ‘regulated’ and ‘non-regulated’ sectors,” the report stated.
In the provincial budget news conferences in 2018, Coady stated the move to separate the oil and gas operations of Nalcor did not need much physical work. Jim Keating is expected to be named CEO of the new Crown corporation.
The oil and gas arm already operates in a different building than the other Nalcor operations at Hydro Place. Coady gave the impression that much of the work to separate the oil and gas operations of Nalcor was largely cosmetic work.
And yet, we wait.