Pourbaix a steady hand to lead Cenovus Energy

Western Business Columnist

Cformer chief operating officer, dealguy and tough-project frontman Alex Pourbaix to be its new president and chief executive officer, prioritizing expertise in dealing with external challenges over knowing the nuts and bolts of the business.

Pourbaix won the job after Cenovus reached internally, across the Canadian industry and globally to find a new leader. He will start his new job Nov. 6, the Calgarybased oilsands company announced Monday.

Pourbaix is an innovative choice because Cenovus needs to make breakthroughs on political issues like market access and because he has a good nose for value and making the right deal, said one industry insider who did not want to be named.

Pourbaix replaces Brian Ferguson, the company’s founding CEO who announced his retirement after stumbling on the $17.7-billion acquisition Mar. 29 of ConocoPhillips’ 50 per cent interest in their joint venture — the oilsands venture jointly owned by the two companies and operated by Cenovus — plus Conoco’s conventional assets in Alberta and British Columbia.

The company’s stock tanked over investor concern that Cenovus overpaid and took on too much debt. The company has been selling non-core assets, but the stock has fallen nearly 29 per cent since the company made the announcement in March. Ferguson’s last day is Thursday, Nov. 2, when Cenovus reports its results for the third quarter.

Unlike Ferguson, an accountant more at ease in the background who was a good fit for a quieter era, Pourbaix is a gregarious lawyer who’s well-versed in deal making and who led TransCanada’s most controversial projects.

The University of Alberta graduate led the fight for the Keystone XL pipeline from Alberta to the U.S. Gulf through years of green lobby pushback and U.S. political theatre. He left TransCanada at the end of March, days after the Calgary-based company received a permit from U.S. President Donald Trump.

“I have had a great career at TRP and with KXL receiving its presidential permit it seemed like a good time to enter a new stage in my career,” Pourbaix said in an email at the time. Pourbaix was not available Monday.

The 51-year-old also led the charge on Energy East, the proposed Alberta-toNew Brunswick pipeline that TransCanada shelved this month after the National Energy Board expanded its review to include upstream and downstream carbon emissions. As part of the project, Pourbaix was involved in negotiations for a partnership with Irving Oil Ltd., the New Brunswick powerhouse interested in building and running a Saint John-based terminal.

Until he left TransCanada, Pourbaix was seen as the most likely successor to president and CEO Russ Girling, 54. But Girling locked up a long-term future in the top job after securing the presidential permit for Keystone XL and acquiring Columbia Pipeline Group for US$13 billion.

“I’m excited to be joining Cenovus,” Pourbaix said in a statement. “Given the quality of its assets and people, I believe there is an excellent opportunity to create significant value and realize the full potential of this great Canadian company. I look forward to working with the Cenovus team to deliver on the near-term commitment to reduce debt while continuing to focus on maximizing the value of the oilsands and Deep Basin assets, with the goal of increasing shareholder returns.”

Pourbaix was responsible for the profitability and growth of TransCanada’s commercial businesses, including leadership of major commercial initiatives such as the development of the company’s power and oil pipeline businesses and responsibility for all of the company’s operations, development and construction activities, Cenovus said. His experience spans corporate strategy, mergers, acquisitions and divestitures, trading and marketing, and stakeholder relations, the company said.

In a note to clients, RBC Dominion Securities Inc. analyst Greg Pardy said the pick could weigh down Cenovus shares because “some investors may be surprised that Cenovus has appointed a CEO without direct upstream oil & gas (or in situ oilsands) experience.”

National Bank Financial analyst Travis Wood said “although Alex does not bring direct experience from the upstream or downstream sub-sector, it is expected that his 27 years of senior management experience from TransCanada will have an impact on Cenovus’s already strong operational expertise and depth.”

The Cenovus stock lost a cent on the Toronto Stock Exchange to close at $12.38 on Monday.

Career transitions between the Canadian pipeline industry and the oil and gas industry it serves by transporting its products are not that uncommon. Former TransCanada CEO Hal Kvisle became the CEO of Talisman Energy Inc. after sitting on its board; former Enbridge Inc. CEO Pat Daniel is the chairman of Cenovus’s board; Chris Bloomer was appointed president and CEO of the Canadian Energy Pipeline Association after running Connacher Oil and Gas Ltd.

Canadian pipeline companies have gained valuable experience in operating in today’s adversarial environment. Companies like TransCanada, Enbridge and Kinder Morgan have led the fight to build oilsands pipelines to tidewater, which involved defending the oilsands in the face of opposition from green groups, while oilsands companies like Cenovus have stayed in the background.

Cenovus’s sister company, Encana Corp., also put value on crisis-tested leadership when it picked Doug Suttles as its CEO in 2013 after an extensive search. Suttles, the former chief operating officer of BP Exploration and Production, led the oil major’s response to the 2010 Gulf of Mexico oil spill.