AbitibiBowa­ter takes dis­pute with N.L. to NAFTA tri­bunal, seeks $500 mil­lion

Cape Breton Post - - COMMENT -

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

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