AbitibiBowater takes dispute with N.L. to NAFTA tribunal, seeks $500 million
MONTREAL (CP) — AbitibiBowater wants a NAFTA tribunal to arbitrate its dispute with Newfoundland and Labrador and is seeking more than $500 million in compensation for what it claims was an illegal expropriation of its assets in the province.
“The expropriation was detrimental to the financial position of our company,” AbitibiBowater president David Paterson said in a statement.
“After operating in Newfoundland and Labrador for more than a century and contributing significantly to the region’s economic, social and sustainable development, the nationalization of AbitibiBowater’s assets was unexpected and unnecessary.”
Kathy Dunderdale, the province’s natural resources minister, said Thursday the province would review the company’s notice of arbitration to assess the allegations.
“As a result, the province will allow the established legal process to unfold and will provide no further comment at this time,” she said in a release.
AbitibiBowater’s filing under the North American Free Trade Agreement is the latest in a series of clashes between the company and the government of Premier Danny Williams.
The Montreal-based paper, pulp and wood products company says it’s owed fair compensation after the province passed legislation allowing it to seize timber rights and other assets following the closure of an AbitibiBowater operation in Grand Falls-Windsor.
The government’s position has been that the timber rights reverted to the province when the mill was closed last February, a move that laid off 800 workers.
AbitibiBowater said it was forced to close the mill because of the global economic slowdown and after unionized workers rejected contract concessions.
The company has been operating under court protection from bankruptcy in the United States and Canada since last April. CALGARY — Another major oilsands player has decided it makes little sense to build a brand new multibillion-dollar upgrader to process the molasses-thick bitumen it scoops out of the ground.
Rather, Canadian Oil Sands Trust (TSX:COS.UN), the controlling partner in the massive Syncrude Canada Ltd. operation, sees selling the raw product on the open market as a better option, based on the current outlook.
It used to be that bitumen sold for far less than the higher-quality type of oil that upgraders churn out. But recently, the so-called “ light-heavy differential” has been narrowing as U.S. refiners struggle to offset declining heavy crude volumes from Mexico and Venezuela.
“ We’re not ruling out doing an upgrader in the future, but the economics have to make sense,” Siren Fisekci, vice-president of investor and corporate relations for Canadian Oil Sands Trust, said Thursday.
“Given the differentials between bitumen and upgraded synthetic crude oil, it doesn’t justify making that investment.”
Other major players in the oilsands have come to a similar conclusion. Imperial Oil Ltd. (TSX:IMO) and its U.S. parent, ExxonMobil Corp. (NYSE:XOM), have no plans to build an upgrader for the first phase of their Kearl Lake oilsands mine northeast of Fort McMurray, Alta.
Suncor Energy Inc. (TSX:SU) has said it plans to produce more bitumen than it upgrades for the time being rather than revive