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Petro-Canada, after years of touting Newfoundland as its home away from home, is pulling out of the retail gasoline business on the Rock.

Calgary-based Petrocan said yesterday that it has struck a deal to sell its 40 service stations in Newfoundland to North Atlantic Refining Ltd., a St. John's-based company owned by global energy trader Vitol SA of Geneva.

The orange banner of North Atlantic, which runs the Come By Chance oil refinery located 130 kilometres northwest of St. John's, will replace Petrocan's familiar red-and-white logo.

Petrocan spokesman Andrew Pelletier said that while Petrocan is withdrawing at the retail level, the integrated oil company remains committed to joint ventures near Newfoundland, including its stakes in the Hibernia and Terra Nova oil production projects.

"We're not bailing. We're here as a company," said Mr. Pelletier, who added that Petrocan will continue making $500,000 in annual donations to local causes such as the Newfoundland Symphony Orchestra.

However, the president of the Newfoundland branch of the Consumers Association of Canada said some Newfoundlanders are viewing Petrocan's announcement as a snub of the province.

Robert Sexty said Petrocan, which is 18.7 per cent owned by the federal government, has to bear in mind that its presence on the East Coast is most noticed by consumers when they drive up to the pumps.

"Petro-Canada hasn't chosen the best of times to do this. With the closure of the cod fisheries, there's this attitude that Newfoundland is being beat up by Ottawa and ignored," Mr. Sexty said.

"There's also a lot of other things going on now. The feds are pulling back from joint agreements with the Newfoundland government, for various things from road building to wharfs to all kinds of infrastructure programs. That's created friction. These things all combine together."

North Atlantic Refining spokeswoman Gloria Warren-Slade said yesterday that newly branded stations will still accept Petrocan credit cards and take part in the Petro-Points loyalty program that rewards motorists for filling up regularly.

The Come By Chance refinery, even though it's close to the Hibernia and Terra Nova fields, processes mostly sour crude -- higher in sulphur content -- from foreign suppliers such as those in the North Sea, Africa and the Middle East. Only two shipments have been processed from Hibernia, and none from Terra Nova.

The bulk of oil production in the Grand Banks is exported by tankers to foreign refineries, which are better equipped to handle the waxy sweet crude from Hibernia and Terra Nova.

Petrocan recently held a 9-per-cent market share in Newfoundland's gasoline business, well behind the top brands -- Irving, Ultramar and Esso.

The number of North Atlantic Refining stations will double to 80 after the deal with Petrocan closes on May 15. Most of North Atlantic Refining's outlets are small, giving it a current 3-per-cent market share. The switching of brands will be completed within a year.

Mr. Pelletier said Petrocan's pullout has nothing to do with Newfoundland's regulated gasoline market.

Report on Business Company Snapshot is available for:
PETRO-CANADA

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