The Future of Irving Oil: Strategic Review of Private Enterprise
Irving Oil, the owner of Canada’s largest oil refinery with a daily capacity of processing 320,000 barrels of oil per day in Saint John, New Brunswick, has announced a strategic review of its private enterprise portfolio that could ultimately lead to a sale or change in its energy portfolio. As a private company, Irving Oil does not publicly disclose its finances, but the company is owned by Canada’s wealth Irving family and is part of Irving Group of Companies, which includes a forestry company, a shipbuilding unit, and logistics operations.
Arthur Irving, president of Irving Oil, is one of Canada’s richest with a net worth of $5.3 billion and part of Canada’s most prominent business dynasties. The Irving family has shown great philanthropy, including nearly $80 million given to lead initiatives for increased energy sustainability. Irving Oil operates over 900 service stations throughout Eastern Canada and New England, and it distributes refined petroleum products. A statement released on Irving Oil’s website noted that, “No decision has been made as to the direction this strategic review might take.”
Expanding Energy Horizons
Irving Oil has been investing in reducing its carbon emissions and growing its hydrogen production business. According to a company spokesperson, Irving Oil is committed to exploring new and sustainable ways of providing energy while still giving customers safe, reliable, and affordable products.
The growth of the hydrogen production business in recent years is mainly due to the world’s shift to cleaner energy, especially a focus on green hydrogen. This change is the primary reason why Irving is exploring hydrogen as a fuel source. According to Reuters, Irving Oil plans to build the largest green hydrogen plant in North America, which they hope will produce 7500 tonnes annually, enough hydrogen “to power the equivalent of 2800 homes per year in Canada indefinitely.” Green hydrogen is produced via splitting water into hydrogen and oxygen, and doing so using renewable energy such as wind or solar power. This process allows the production of hydrogen with zero greenhouse gas emissions.
One challenge is that green hydrogen remains relatively expensive to produce as compared to fossil fuels. However, the cost of green hydrogen is expected to decrease as production grows worldwide due to advances in hydrogen technology. Hydrogen produced from non-renewable sources such as fossil fuels emitting carbon dioxide is the cheapest type of hydrogen. But as governments worldwide concentrate on the climate crisis, major refineries and petrochemical companies are now — along with Irving Oil — searching for ways to produce “green hydrogen.”
The Future of Energy is Green
As the world continues to move towards more sustainable usage of energy, more and more companies are realizing the benefits of shifting to green energy usage. Green energy usage is not only environmentally friendly, but it’s also beneficiating to business. For example, the cost of a renewable energy resource like the sun or wind is zero or close to zero as compared to oil, which is subject to price manipulation. Also, the shift to sustainable energy can help Irving Oil retain customers that are focused on climate change and the green energy revolution.
According to the International Energy Agency, hydrogen production will grow to nearly half all clean fuel production by 2050, which points to the enormity of the opportunity for companies like Irving Oil that are seeking to grow a sustainable hydrogen business.
Summary
Irving Oil, Canada’s largest refinery owner, part of Irving Group of Companies, has announced a strategic review of its private enterprise portfolio that could potentially lead to a sale or change in its sprawling energy portfolio. As a private company, Irving Oil does not disclose its financial status, and this review’s full extent is unclear. Irving Oil is also growing its hydrogen production business while also investing in reducing carbon emissions. Hydrogen is increasingly seen as one of the primary ways for the world to transition towards sustainable energy use. Irving Oil plans to build the largest green hydrogen plant in North America as part of their shifting focus towards green energy usage. Shifting towards sustainable energy can help Irving Oil retain climate-conscience customers while also benefiting the environment.
Reference:
https://www.reuters.com/article/ireland-energy-irving-oil/irving-oil-to-build-largest-n-american-renewable-diesel-low-carbon-jet-fuel-plant-idUSL1N2P2187
https://www.reuters.com/business/energy/hydrogen-energy-takes-off-some-oil-companies-pivot-greener-products-2021-04-28/
https://www.theguardian.com/environment/2021/mar/08/green-hydrogen-how-it-could-become-cheaper-than-fossil-fuel-hydrogen
https://www.ft.com/content/c1906fc0-d4eb-11e9-a0bd-ab8ec6435630
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Irving Oil, owner of Canada’s largest oil refinery, has launched a strategic review of private enterprise that could result in a sale or change to its sprawling energy portfolio.
The company, founded in 1924, is owned by Canada’s wealthy Irving family. Their conglomerate Irving Group of Companies, which includes a forestry company, a shipbuilding unit and logistics operations, is an industrial powerhouse in the province of New Brunswick.
Irving OilThe refinery processes 320,000 barrels of oil per day in Saint John, New Brunswick. It also operates more than 900 service stations in Eastern Canada and New England in the United States and distributes refined petroleum products. Ireland’s only refinery is operated by Irving Oil.
Arthur Irving, president of Irving Oil, is one of the Canada‘s the richest with a net worth of $5.3 billion, according to Bloomberg. The Irving family is one of Canada’s most prominent business dynasties and has shown great philanthropy, including an $80 million gift to Dartmouth College in the United States, which led to the establishment from the Arthur L Irving Institute for Energy and Society.
Until 2022, the family owned all of New Brunswick’s major newspapers, which they sold to Postmedia, Canada’s largest newspaper chain, known for its preference for Conservative politicians. Family member Jamie Irving became executive chairman of Postmedia after the sale.
As a private company, Irving Oil does not disclose its finances. The company’s website says it employs over 4,000 people. He had cut more than 1,000 jobs during the coronavirus pandemic as demand for oil plummeted. At the same time, Irving has invested in reducing its carbon emissions and growing its hydrogen production business.
A statement on Irving Oil’s website says a “series of options are being evaluated related to the future of the business.” He did not provide a reason for launching the strategic review.
“We are proud of the strong position our business finds itself in today, having achieved significant growth in our core business and made good progress in driving the energy transition,” the statement said.
“No decision has been made as to the direction this strategic review might take,” the statement said.
https://www.ft.com/content/5da8cad3-e2fc-4b36-9fd5-5c1383feb883
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