Relief — and speculation — after Irving Oil opts against sale
Canada’s biggest oil refinery will remain in local hands, perhaps because of Trump tariff threat, expert says
There's relief in Saint John and across New Brunswick that the province's biggest exporter is staying put.
There's also no clear answer why Irving Oil made the decision not to sell.
The century-old company announced in June 2023 that it was launching "a strategic review" of the company, including a potential full or partial sale.
That raised the prospect of a new out-of-province owner scaling back operations in Saint John, including at the company's head office.
"There has been some instability with that whole thing being up in the air. We weren't sure what was going to be happening," Saint John Mayor Donna Reardon said.
"People talked about that beautiful new building we have up on King's Square. Would that become vacant? Would that go up for sale as well?"
Late Tuesday the wait was over. The company said in a news release that it is "strong and secure" and would not be sold.
"We are pleased to confirm Irving Oil will remain a privately held company, and we remain as committed to our people, our customers and our communities today as ever before," it said.
The Saint John refinery is Canada's largest, processing 320,000 barrels of crude oil per day into gasoline and other fuel products.
It's also New Brunswick's largest emitter of greenhouse gases that warm the climate.
The company has 4,000 employees, with almost half of them at head office and at the refinery.
Steve Henderson, an uptown Saint John business owner, says the decision will keep a lot of business in the city. (Graham Thompson/CBC)
"A lot of their staff that work at the home office shop with us, so that's going to keep a lot of business in the city," said Steve Henderson, an uptown business owner whose wife works for Irving Oil.
Another business owner from outside the city, Ross Harris, said he goes out of his way to buy Irving gas.
"I think we need Irving here. New Brunswick wouldn't be what it is today if it wasn't for Irving," he said.
There’s relief that Irving Oil’s staying put, but company’s reasons are unclearNow that the guessing game is over about a potential new owner, the speculation has turned to why Irving made the decision to stick with the status quo.
"Business is good for them right now," Henderson said.
"They're going to keep making money so they may as well keep things going as it is."
The company did not respond to an interview request from CBC News.
Ross Harris, another business owner, says Irving is needed in New Brunswick. (Graham Thompson/CBC)
Its statement doesn't explicitly exclude the possibility that the family sold a minority ownership stake in the company to non-family investors.
But indications are that the company is sticking with the status quo: ownership by a trust controlled by the family of Arthur Irving, who died last year.
New CEO
Tuesday's announcement identified a new CEO, Jeff Matthews, who has been Irving Oil's chief business development officer since 1994 and added chief financial officer to his duties six years ago.
"Having Jeff Matthews at the helm shows continuity," John Herron, New Brunswick's natural resources minister, said.
"His business development background means it's a company that's focused on the future."
University of New Brunswick economist Herb Emery said it's possible Irving Oil would "perceive more empathy" from federal Conservative Leader Pierre Poilievre after a decade of increasingly stringent regulations on greenhouse gas emissions.
Economist
Herb Emery says another factor in Irving's decision may have been the
threat of U.S. tariffs on Canadian exports, making the Saint John
refinery less attractive to potential buyers. (Edwin Hunter/CBC)
The federal Conservatives are promising to adopt a more oil-friendly approach if they win the election later this year, including repealing Liberal changes to the federal environmental approval process.
Poilievre promised in 2022 to ban foreign oil imports from authoritarian countries including Saudi Arabia — one of Irving's biggest suppliers of crude.
The Saint John refinery has imported Saudi oil since it opened in 1960. In 2023, it imported the equivalent of 53,000 barrels per day of Saudi crude, 20 per cent of its total imports.
That made Saudi Arabia its third-largest foreign supplier after the United States and Nigeria.
Poilievre called that level of foreign oil "insane."
Conservative
Leader Pierre Poilievre has said his policies would help get more
Canadian oil to the Irving refinery in Saint John. (Ed Hunter/CBC)
In a video last year, he didn't repeat his promise of a ban but said his policies would help get more Canadian oil to the Irving refinery, including from Newfoundland and Labrador, where the province wants to boost its offshore production.
"Defund the dirty dictators abroad," Poilievre said in the video. "Produce responsible Canadian energy."
Emery says another factor in Irving's decision may have been the threat of U.S. tariffs on Canadian exports, making the Saint John refinery less attractive to potential buyers.
The refinery exports 80 per cent of its products to the United States, making it vulnerable to Donald Trump's threat of 25-per-cent tariffs.
"For a refinery that's exporting into the United States with most of its product, in the current trade climate, I don't think there'd necessarily be a lot of buyers," said Emery, who emphasized he was speculating.
"Maybe the asset value isn't as high as they may have perceived prior to the Trump election. It could be as simple as that."
Energy Minister René Legacy pointed out that the Irving refinery also imports crude oil from the U.S., making it "another great example" of the integrated cross-border economy that would make tariffs a bad idea.
Emery said it's possible Irving has merely postponed consideration of a sale until the tariff threat is over and the Canada-U.S. trade relationship stabilizes.
"The decision may be to keep the asset, ride it out and see what happens," he said.
ABOUT THE AUTHOR
David Amos
Surprise Surprise Surprise
David Amos
"Having Jeff Matthews at the helm shows continuity," John Herron, New Brunswick's natural resources minister, said.
"His business development background means it's a company that's focused on the future."
Yea Right
Reply to David Amos
Gov $ ensures higher consumer prices, poorer quality service/product, less consumer choice... and also, continuity.
Aaron Humeritz
Reply to Aaron Humeritz
They were absorbed.
Aaron Humeritz
Reply to Allan Marven
Investment spooked off by this federal government/leader.
Reply to Aaron Humeritz
Irving Oil announces company won't be sold, ending nearly 2 years of speculation
Company announced new CEO and decision to remain a private company
Irving Oil has announced the company will not be put up for sale, a possibility it had raised in 2023.
"We are pleased to confirm Irving Oil will remain a privately held company, and we remain as committed to our people, our customers and our communities today as ever before," a news release from the company late Tuesday afternoon said.
Irving Oil initially announced a strategic review in June 2023 and said options such as the sale of the company or a new leadership structure would be considered.
Tuesday's announcement said the company has completed the strategic review process with the appointment of Jeff Matthews as president and CEO.
Matthews has worked for the company for 30 years as chief business development officer, chief financial officer and chair of the executive management committee, the release said.
Jeff Matthews, pictured on the Irving Oil website as part of the
company's leadership team, will take over as president and CEO. (Irving
Oil)
Founded in 1924 by K.C. Irving, Irving Oil, with 4,000 employees, operates Canada's largest refinery, which processes 320,000 barrels a day.
K.C.'s son Arthur Irving, who ran the company for decades, died last year.
Arthur had left his role as company chairman just months after the strategic review was announced.
His daughter Sarah Irving — who had been the only one of his children still working at Irving Oil and widely seen as his heir apparent — left her position of executive vice-president at the same time.
The lack of any Irving family member on the senior leadership team added to the rumours and speculation about the company's future as a privately held, family-owned business.
At the time Irving Oil first announced the strategic review, then-premier Blaine Higgs and Saint John Mayor Donna Reardon both expressed concern about the risk of the company leaving the province.
Climate change activists also spoke out about the possibility of the announcement being used as a ploy to undermine climate initiatives, and industry insiders were taken aback by the sudden review of the company.
But Irving's new CEO will still face plenty of uncertainty overseeing a company that exports 80 per cent of its products to the United States.
With Donald Trump taking office next week, Canadian leaders are preparing to face his threat of imposing 25 per cent tariffs on imports from Canada.
ABOUT THE AUTHOR
With files from Jacques Poitras
David Amos
https://www.cbc.ca/news/canada/new-brunswick/irving-oil-strategic-review-1.6868338
David Amos
"In 2021, Irving Oil announced a partnership with Calgary-based TC Energy"
Now there is a telling thing
Robert Joyce
Reply to David Amos
You going to leave the rest of us in suspense? Telling in what way exactly?
David Amos
Reply to Robert Joyce
Check out the new Commissioners in the EUB
William Murdoch
Reply to David Amos
They will sell off soon. Some just don't approve.
David Amos
https://www.cbc.ca/news/canada/new-brunswick/irving-oil-strategic-review-1.6868338
614 Comments Remain
David Amos
"Irving Oil spokesperson Katherine d'Entremont did not immediately respond to a request for an interview."
Why is it that I am not surprised?
Robert Joyce
Reply to David Amos
They are a private company, they don’t owe you (or me) any information.
David Amos
Reply to Robert Joyce
and your point is?
Robert Joyce
Reply to David Amos
Futile speculation about Irving’s finances make folks look foolish.
David Amos
Reply to Robert Joyce
Clearly you do not understand the circus
Donald LeBlanc
Reply to Robert Joyce
True, the finances are well concealed.
William Murdoch
I see an opportunity for oil now. Diesel fueled generators powering EV Charge sites
David Amos
Reply to William Murdoch
IMHO Natural gas fueled generators would be better
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