Former prime minister Jean Chrétien has been on the job at PetroKazakhstan Inc. for barely a day and already he's earned his keep at the oil company.
PetroKaz's announcement yesterday that it has retained Mr. Chrétien as a special adviser sparked a 5-per-cent rally in the senior producer's shares, adding $118-million in market value.
Investors appear to have let bygones be bygones on his pro-Kyoto stance, betting that the former politician will be able to help smooth the sometimes rocky relations between the Calgary-based company and the Kazakh government in central Asia. The former Soviet republic alleged last fall that PetroKaz took advantage of its dominant market position and overcharged farmers for diesel fuel during the busy harvest season.
PetroKaz climbed $1.52 to close at $31.65 on the Toronto Stock Exchange, boosting the firm's worth on the TSX to $2.47-billion. For Bernard Isautier, PetroKaz's chairman and chief executive officer, the halo effect of the new addition to PetroKaz's roster meant that his shares jumped by $6.6-million in value to $138-million.
"I don't think there's any doubt that investors are associating Mr. Chrétien joining PetroKazakhstan with a positive indicator," said Wilf Gobert, an analyst with Peters & Co.
Mr. Isautier beat out numerous other Canadian energy companies vying for the attention of Mr. Chrétien, 70, who recently accepted an advisory role at Calgary law firm Bennett Jones.
Jeffrey Auld, PetroKaz's manager of investor relations at the British office near London, said Mr. Isautier has known Mr. Chrétien for many years.
There's even a golf course in Kazakhstan for the former prime minister to work on his swing with Mr. Isautier after a long international flight.
Mr. Auld cautioned against expecting huge feats. "This is not an appointment of a Mr. Fix-It. This is an appointment of someone who has tremendous gravitas internationally."
For many Calgarians, the announcement of Mr. Chrétien joining an oil company headquartered in Calgary seems like a time warp since he was part of the Trudeau government that introduced the much-hated National Energy Program in the early 1980s to control Western Canada's petroleum industry and cap domestic prices.
While Mr. Gobert said the two men aren't fishing buddies, they have been on social outings in the past, and former PetroKaz director Robert Kaplan also served as a Liberal cabinet minister during the Trudeau era.
As for Mr. Chrétien's support for the Kyoto accord on reducing greenhouse-gas emissions, Mr. Gobert pointed out that Ottawa recently enhanced rules for development in northern Alberta's oil sands -- a far cry from the fierce battles spurred by the NEP more than two decades ago.
"Is it a good thing to have the former prime minister making your introductions internationally? Well, yes. This has to do with getting oil out through Iran and China," said Bill Wheeler, president of Vancouver-based Leith Wheeler Investments Inc., which owns roughly 6 per cent of PetroKaz.
Mr. Isautier, 61, is a well-known executive in Canada's oil patch, nearly as much for his reputation as a French aristocrat with eclectic holdings as for his energy know-how. He owns a private beach resort -- a 10-acre atoll called Vahine -- in French Polynesia near Tahiti in the Pacific Ocean and he has a villa on the French Riviera.
Mr. Isautier was born in France and attended elite schools in Paris, immersing himself in engineering and economics. His sophisticated global background may have been the winning edge, observers say.
Mr. Chrétien is being portrayed as someone who could be a possible trump card for PetroKaz in its dealings with foreign governments.
His part-time job will focus on reducing the strain between PetroKaz and Kazakhstan. He will also serve as a regional ambassador of sorts amid the company's foray into new oil export markets such as Iran, China and various Caspian countries.