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Distance doesn’t blur oil sands focus for Canadian Natural’s Murray Edwards

A portion of the Shell Albian Sands oilsands mine is seen from an overlook near Fort McMurray, Alta., on July 9, 2008.

Jeff McIntosh/THE CANADIAN PRESS

Murray Edwards moved across the pond for a change of scenery, but he can still make a splash back in Alberta.

The chairman of Canadian Natural Resources Ltd. – who relocated to London from Calgary last year – has a made a career of hunting down oil and gas assets when they are out of favour, snapping them for a good price and transforming his company in the process.

He's done it in the biggest way yet with the $8.5-billion (U.S.) purchase of Royal Dutch Shell PLC's oil sands assets, a transaction that cements Canadian Natural as one of the trio of companies that now dominate the mining and processing ends of the bitumen business, which is known for massive reserves, but also high costs and specialized know-how.

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Canadian Natural, Suncor Energy and Exxon Mobil's affiliate Imperial Oil have all looked beyond today's many financial and environmental stumbling blocks and bulked up, even as competitors retreat to seek quicker payouts elsewhere and solutions to financial strains that created pressure as oil prices cratered.

Mr. Edwards made the approach, sensing an opening as Shell looked to sell $30-billion of assets worldwide. His timing was perfect, as the only other logical bidder – Suncor – is digesting $5-billion (Canadian) of assets it bought recently, including Canadian Oil Sands.

The deal includes Shell's interest in the operating Athabasca Oil Sands Project, which pumps out 255,000 barrels a day, as well as undeveloped leases that could keep Canadian Natural busy for decades to come. As part of the transaction, Shell will get a 9-per-cent stake in Canadian Natural. In a side deal, the companies intend to buy Marathon Oil Corp.'s Canadian unit for $1.25-billion each. It all adds up to a 50-per-cent bump in reserves for Canadian Natural.

It was in a similar environment in the late 1990s when Mr. Edwards and Canadian Natural first entered northern Alberta's oil sands through a $1.6-billion acquisition from BP PLC. The deal was hammered out during that most Calgarian of events, the Stampede, when much of the business community was distracted by hoedowns and whisky.

A year ago, the financier – who is also known for his ownership stakes in the NHL's Calgary Flames, a range of ski resorts and a host of other holdings – created a stir when he changed his home address to a flat in London's tony Mayfair district. Some in Alberta asserted he had left due to a rising tax burden, though he later told The Globe and Mail he wanted a change in perspective, partly after his marriage broke up.

"I have lots of investments on a global basis, some based in Europe. I have lots of employees in the U.K. so it's a natural fit for me to live there," he said in May. "Plus it's an opportunity to step back. I'm stepping back from a lot of my day-to-day things and London's a good place to do that."

It would appear he was unable to stay stepped back.

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Indeed, the London locale proved advantageous as the companies hammered out the biggest oil sands asset deal to date, Canadian Natural president Steve Laut said on Thursday.

"Murray was critical in the negotiation and the structuring of this deal. Obviously it was a team effort, but this is Murray's forte, and he was critical in it. There were meetings in London. As you know, Shell has their headquarters over in Europe," Mr. Laut said.

Following more than two years of industry downturn, Europe's oil companies are turning their backs on the oil sands they once spent big money to accumulate so they could concentrate on their highest- and quickest-return properties to put balance sheets on more solid footing.

Mr. Edwards sees opportunity, and he's been cagey about it. When Alberta NDP Premier Rachel Notley won the last provincial election, Canadian Natural was among the most vocal in warning the fledgling government against any moves that would heap costs on the industry.

That's why, half a year later, he surprised nearly everyone in Alberta's business and political sets by standing beside Ms. Notley when she announced her government's ambitious and contentious climate plan, with such measures as a carbon tax and cap on emissions from the oil sands.

Now, Canadian Natural controls much more of the oil sands, at 60 per cent of what it would cost to build a new plant. Transaltlantic distance doesn't seem to have been a problem.

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With a file from Jeff Lewis

Video: Take an aerial tour of Fort Hills, the latest oil sands megaproject
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About the Author
Mergers and Acquisitions Reporter

Jeffrey Jones is a veteran journalist specializing in energy, finance and environment for The Globe and Mail’s Report on Business, based in Calgary. Before joining The Globe and Mail in 2013, he was a senior reporter for Reuters, writing news, features and analysis on energy deals, pipelines, politics and general  topics. More

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