Canada’s Nexen eyes Sterling, S Am sodium chlorate

17 September 2002 21:25  [Source: ICIS news]

TORONTO (CNI)--Canada’s Nexen is "looking at opportunities" to expand its sodium chlorate position in South America, and also remains interested in acquiring pulp and paper chemical assets from troubled Sterling Chemicals in North America, officials said Tuesday.

Said Nexen president and chief executive officer Charlie Fischer today: "We do see opportunities to invest in South America … we see South America as a good place to be from our pulp and paper point of view."

According to Fischer the South American pulp and paper industry is a very sustainable and low-cost business, "where you can grow a tree within about seven years."

He added, however, that while interested, Nexen has "no specific" plans at this moment.

The company earlier this year completed a 70% expansion at its facility in Aracruz, Brazil where its sodium chlorate capacity now stands at 60 000 tonne/year.

Fischer also said that "we have been evaluating" some of the sodium chlorate assets of Sterling Chemicals, which is currently under US Chapter 11 bankruptcy reorganisation. "As the process will evolve, we will determine whether there is any opportunity for us or not," he said.

Fischer noted that Canada’s proposed ratification of the Kyoto climate change accord is not likely to have any substantial impact on Nexen’s Canadian-based sodium chlorate production since the company mostly uses "clean-energy" hydro-electricity to power its plants here. Thus, while sodium chlorate production is very energy intensive, the impact for Nexen in terms of greenhouse gas emission is "relatively low," Fischer explained.

He added, however, that "the chemicals business is no different from any other business, and we would have to wait and see what the structure of any (Kyoto-related) regulations will be to understand what our costs will be."

Fischer was briefing analysts here on the impact of Kyoto on Nexen and Canada’s oil and gas industry. Canada’s government announced earlier this month that it will put ratification of the Kyoto-protocol to a parliamentary vote by year-end. Ratification is very likely since the ruling Liberal party has a strong parliamentary majority and three of the four opposition parties favour ratification.

Calgary, Alberta-based Nexen, primarily an oil and gas company, is also one of North America’s largest producers of sodium chlorate.

By: Stefan Baumgarten
+1 713 525 2653

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