If the federal government actually tries to take over foreign-owned petroleum interests as suggested in last week's budget and energy white paper, Ottawa may be in for a nasty surprise.
The multinationals, mostly controlled by American parents, do not appear to be in a selling mood, and they say it will take more than cash to make them leave the Canadian oil patch.
Certainly, they are not going to do so voluntarily, according to the majority of foreign operations polled here recently as to whether they would sell out to the government. The recurring, firm, monosyllabic answer, "No," rolled off the lips of oil company executives, tired from having studied the combined package of ostensibly bad news late into the night before.
Amoco Canada Petroleum Company "is not up for sale," said a spokesman, expanding his initial "no."
Bill Bristow Jr., president of Chevron, the company that three years ago scored Canada's biggest oil strike on land at West Pembina, in southern Alberta, and a year ago struck oil off Newfoundland, was "prepared" for the blow.
"We would have had to have our heads in the sand not to know that something was coming," he said. Yet, the budget and tax measures seemed "more stringent than what we had anticipated."
Mr. Bristow said that Chevron was "definitely not for sale." Shell Canada also responded that it "is definitely not for sale." Other major operators, including Imperial Oil Ltd., Canada's largest, Gulf Canada, and Texaco Canada, have all reserved official comment until later.
Privately, however, senior oil company personnel state: "We would have to be booted out of here." None of them expected that their foreign parents would voluntarily liquidate their respective local operations.
Smaller foreign-owned companies, including Petrofina Canada and Hudson's Bay Oil & Gas Co. Ltd. (HBOG), owned by Belgian and US majority interest, replied with an emphatic "no" when asked if their companies were up for sale.
Ted Baugh, Petrofina's chief of production and exploration, said that his company's Canadian assets, together with its prospects (at least until last week), represented "one of the few bright spots" in the parent's worldwide operations.
Similarly, HBOG, some 52.8 percent owned by Conoco, "is not on the block," a senior executive affirmed.
Petrocanada's chairman, William Hopper, states that it will be biding its time before picking up an acquisition -- presumably an integrated foreign-owned operation -- as mandated by the white paper of Energy Minister Marc Lalonde.
"None of them [other obvious targets] are up for sale, so we will be just sitting here contemplating our navels for a while." In any case, acquisitions on the scale contemplated need vast amounts of money.
Petrocanada has evaluated virtually every likely candidate for acquisition, Mr. Hopper disclosed. At today's prices most of the acquisitions would be prohibitively expensive, he noted.
The state entity will be able to draw on some of the $40 billion (Can.) that will be generated by new levies to fund future acquisitions.
It will also have what the rest of the industry here considers a "free ride" of a 25 percent interest in frontier areas of oil exploration, in addition to other "perks."
Although both the budget and the energy white paper are said to have been intended as a first step toward "Canadianizing" the now 70 percent foreign owned petroleum industry here, few of the native independent operators saw tangible benefits in them.
In fact, a leading securities firm marked down the book values of all junior and medium-size domestic companies by 25 percent because of the combined adverse effects of the anticipated new fiscal and energy measures.
Analysts also point out that several companies intent on enlarging their Canadian content or issuing shares here for the first time may not be able to comply with the federal edicts because of unfavorable market conditions.
Share values on most Canadian exchanges tumbled in the wake of the budget. The strict federal timetable of reducing foreign oil industry ownership to 50 percent by 1990 is not expected to help market conditions.
The majors may have no alternative but to accept an eventual Petrocanada offer, most analysts feel. Otherwise, Canada could nationalize them only partway.
As a rule of thumb, gas producers can expect up to a 15 percent reduction in cash flows while oil producers may not now realize the coveted $10 per barrel "netback" until perhaps 1985.
Now receiving about $7.60 per barrel net, most producers expected to realize this year.
"The economics of the business have been completely shattered; we are today [ Oct. 29] worth a million dollars less than yesterday [budget day]," the financial vice-president of a junior oil company in Calgary lamented.