St. John businessman Dean MacDonald says he wants a piece of Terra Nova

Dean MacDonald, a St. John’s businessman, says he is interested in becoming a partner in the troubled Terra Nova oil field.

When MacDonald spoke to CBC News by phone on Friday, he said he has been approached by a number of oil companies involved in the Terra Nova joint venture and would like to explore the possibility of acquiring an equity stake.

“We’re not participating at this point, but we’re certainly interested in participating as it progresses,” MacDonald said.

MacDonald, who declined to give a recorded interview, said he is open to a “significant” share of ownership.

“We are interested in up to 20 percent of the project, if it is available.”

Understands the business

MacDonald owns Deacon Investments Limited, a private equity investment company based in St. John’s with interests in a broad range of sectors in North America and the United Kingdom, including sports and recreation, real estate, technology and oil and gas.

He also owns the Newfoundland Growlers of the ECHL, a professional hockey team based at the Mile One Centre in St. John’s.

More recently, he made headlines for his failed attempts to buy Mile One Centre from the City of St. John’s. He was also part of a failed attempt to buy the defunct North Atlantic Oil Refinery in Placentia Bay, and is known to have made a bid to buy the Marble Mountain ski resort near Corner Brook from the provincial government.

He is also closely associated with the Newfoundland and Labrador Liberal Party and has considered running for party leader.

He is the largest private shareholder in ClearStream Energy, an oil and gas company headquartered in Calgary with approximately 3,000 employees.

Approached by an oil company

MacDonald declined to provide details, but said he had been approached by one of the oil companies involved in the Terra Nova joint venture while efforts were still being made to reach a deal.

“We’ve tried hard to invest in this province,” MacDonald said, adding that it’s not unusual for private equity firms to get involved in the late-stage development of an oil field as multinationals pull out in favor of more attractive investments.

That appears to be the case with Terra Nova. CBC News has confirmed that four of the seven oil companies that make up the joint venture, representing nearly 40 percent of the shares, have expressed a desire to exit the project.

In late May, Suncor CEO Mark Little admitted it was unlikely all seven partners would agree on a plan to return Terra Nova to production.

Little set Tuesday as a “brick wall” deadline for a unanimous decision on a way forward. The options are what’s called an asset life extension, which would require an estimated $600 million refit of the Terra Nova, or abandoning and decommissioning the field, which began producing in 2002 and was linked to more than 1,000 direct jobs just two years ago.

In the run-up to the deadline, the provincial government announced that it had rejected an offer to take a stake in the project, saying it was too risky for a province already struggling with a financial crisis to get involved in an oil field that is nearing the end of its life.

Tuesday’s deadline passed without any word from project leader Suncor, leaving the industry bracing for a worst-case scenario.

However, on Wednesday evening, the company announced that an agreement in principle had been reached to restructure the project’s ownership, with the aim of approving the extension of the asset’s life this fall.

Suncor announced that it was increasing its stake in the project from 38 percent to 48 percent and that several other owners were increasing their stake in the project in exchange for compensation paid by the remainder.

MacDonald was not part of the agreement in principle announced this week and would not say how much money he is willing to invest.

Earlier this week, Energy Minister Andrew Parsons said other parties were interested in investing in Terra Nova. On Friday, Parsons said he was unaware Deacon Investments was on the list of potential investors when he made the comment.

“If there is a private interest and it’s a Newfoundland and Labrador company, that’s great,” Parsons said. “But my only concern is that this life extension gets approved and the Terra Nova goes back into production.”

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