Calgary – Crescent Point Energy has grown more than any other company in the province over the last 10 years, from a smaller intermediate producer to one of the largest oil companies in Canada, and the most active driller in the country for the last several years.
That growth had largely coincided with Premier Brad Wall’s term in office. Wall announced his pending retirement from politics in early August. Pipeline News spoke to Crescent Point president and CEO Scott Saxberg on Aug. 25 about Wall’s impact on that company’s growth.
Pipeline News: Crescent Point has grown phenomenally over the last ten years while Brad Wall was premier, probably moreso than any other company in Saskatchewan. Ten years ago the company invested over $700 million in land purchases, spawning the biggest land sale this province has ever seen. Was there any linkage to the political climate under Wall and your confidence to invest in a province under his leadership?
Scott Saxberg: He brought a lot of consistency to the province, in what I would describe over the last 10 years has been a rocky road for oil and gas in B.C. and Alberta, and in Canada in general, with a lot of the policy changes. Energy trusts, taxation changes, corporate structure, all that kind of stuff happened over the last 10 years. I think his government, where they excelled, was providing that consistency and sticking with it.
You know, Saskatchewan had a great system in place that was there obviously before Brad and his group, and that’s one of the things I always keep pointing to. The group underneath, the day-to-day bureaucrats and that are, I think, some of the best in Canada, and understand business, oil and gas regulations, and how to provide that environment for strong growth and meeting all the challenges that industry has faced over the last 10 years.
P.N.: Especially during his first term, Minister of Energy and Resources Bill Boyd made abundantly clear there would be no change in the royalty regime, a regime which had been established under the Calvert NDP. Wall spoke many times about “no changes in royalties.” What did that mean for the growth of Crescent Point?
Saxberg: It allowed us the consistency to go then, to capital markets, to raise equity and funds to develop these large, large resource plays. That was a key, I think, moment in time that created that consistency in the business community and investment community to then invest in Crescent Point and allow us to invest in these large assets. They’re multi-billion dollar, multi-year, long-term projects that needed that consistency. They still need that consistency today.
P.N.: Could you have grown this much in an uncertain political climate?
Saxberg: Although we were sheltered, to some extent (by) Saskatchewan’s consistency, we were obviously exposed to the Canadian changes and Keystone XL, and royalty changes in Alberta. We still had to battle through all these changes over the last 10 years. It’s been a consistent stream of it, for 10 years, I would say, between the royalty trust changes in 2006, all the way through royalty changes in Alberta, Keystone, pipeline issues, carbon tax, all that stuff that continuously changes the landscape.
It’s obviously been very, very helpful to have that consistency in Saskatchewan, but as a company, and all the energy companies in Canada, are still fighting those changes.
P.N.: I didn’t think Keystone would be that much of a factor for you.
Saxberg: None of our production goes into Keystone, but inadvertently, or indirectly, a lot of investors, specifically European investors, stayed away from Canada when that Keystone announcement was made. When you look back, all companies in Canada, U.S. ownership, foreign ownership in all the companies diminished dramatically through that time period, of the first delays of Keystone. It wasn’t until the Canadian dollar really, really weakened that you got increased investment into Canada from the U.S. and foreigners back maybe three years later.
P.N.: Have you maintained a relationship with Premier Wall over this past decade? How has that relationship grown or changed? Ever put in a round of golf with him?
Saxberg: (laughs) I think I golfed with him maybe ten years ago, when we first started. We talk maybe a couple of times per year, through the premier’s dinner and so forth.
Our relationships, as a company, are deep within Saskatchewan, throughout the communities and people that we work with day-to-day and the different varying governments and government agencies that over 17 years (we’ve been) developing. I think that’s been the real strength, for us in Saskatchewan.
P.N.: How many times has Brad Wall invited you to move head office to Regina?
Saxberg: (laughs) I think we’ve had maybe two conversations on it. It’s something that really, the question is more a statement to say they’re open for business and competitive with their counterparts, be it states in the U.S. or Alberta or Manitoba. It’s really more of a statement towards that, which I think has made him a strong leader relative to his peers, understanding the competitive nature of attracting capital into the province. I think that’s really where I’ve always taken that question, as what that means.
In our office, alone, I don’t know what the percentage is. I haven’t done a survey, but probably 25 to 30 per cent of office in Calgary are from Saskatchewan, and many of them would like to go back to Saskatchewan, but obviously this is where a lot of the business is done, unfortunately on the oil industry side, for Saskatchewan. We have two big, strong head offices already in Saskatchewan, in Shaunavon and Weyburn. We’ve really grown and developed those offices, to develop the resources there and to be mindful of how that works.
We’ve put a lot of money through STARS air ambulance, the Weyburn hospital, all though the different communities, and put that money to work in lieu of the head office being there.
P.N.: How has Wall’s advocacy for the energy industry, and, in particular, pipelines like Keystone XL, made a difference, from your perspective?
Saxberg: I think it’s the recognition that Canada has to be competitive, and attract capital. He, early on, understood that, and was really a proponent of that and waking Canada up to the fact this is a competitive industry. We used to be a one-stop shop for the U.S. for energy. Now that they’re more self-sufficient, we have to compete with their own energy development. I think that, to me, that was where he brought in that strength, to understand that competitive nature; and then really promote that in Canada and wake people up to that.
P.N.: What would you hope to see from a successor, from Crescent Point’s standpoint?
Saxberg: I think that business consistency, the consistency of the passion for development of the province. We had very strong relationships with the NDP and Lorne Calvert, prior to Brad, and we’ll continue to have those strong relationships within the different government components. We’ll always be there as a company. Obviously, our main assets are within Saskatchewan, so it’s a strong growth area for us and a strong focus. So we’ll work with whoever does step into his position and go from there.
P.N.: Is there anything you would like to add?
I hope that he continues his strong statesman view with Canada and is always there to keep pushing these things. We wish him the best in his endeavours. It’s not an easy job, and he’s done a great job doing it. I think one of the key things that is one of his legacies is that he built a super strong team around him, and I’m encouraged that anyone who does step up will be very strong because of that.
