CALGARY, Alberta (Reuters) - Enbridge Inc, which wants to build the controversial Northern Gateway pipeline to haul Canadian oil sands crude to the Pacific Coast, said on Monday that the project’s leading proponent, Chief Executive Pat Daniel, will retire this year.
The company said Daniel, 65, will leave by year-end and will be replaced by Al Monaco, the executive now heading the company’s natural-gas pipeline business. Enbridge said Monaco will join its board and take on the role of president immediately.
The choice of Monaco was a surprise to some as other senior executives such as Chief Financial Officer Richard Bird and Stephen Wuori, who oversees the oil pipeline business, were seen as legitimate contenders for the position.
“I think he’ll be a fine CEO,” said Steven Paget, an analyst at FirstEnergy Capital. “He had to be considered one of the three frontrunners for the position. I‘m very pleased Enbridge picked an internal candidate.”
Enbridge pipelines carry the bulk of Canada’s oil exports to the United States. Daniel, who took charge in 2001, concentrated on expanding its pipeline capacity into the U.S. Midwest to transport growing production in the northern Alberta oil sands.
Daniel’s retirement will come well before hearings into the company’s marquee project, the C$5.5 billion ($5.5 billion) Northern Gateway pipeline to carry oil sands crude from Alberta to a Pacific port, are complete. However Daniel will turn 66 this summer, and he said it was time to let others take over.
“I feel very, very committed to it personally,” Daniel told reporters. “It’s been 12 years since we started the concept but it’s going to take some time to work its way through ... and we’ve got such great young talent in this company, I just don’t want to stand in the way.”
Daniel also positioned Enbridge as a renewable power supplier, building and acquiring wind power and solar facilities in Canada and the United States. He also expanded the company’s natural-gas pipeline business. That, and the rising volumes of crude flowing from the oil sands, brought a steady rise in earnings and the company’s share price.
“Under his leadership, Enbridge’s share price has grown by 250 percent and the average annual total shareholder return has been 15.8 percent,” board Chairman David Arledge said in a statement. “The market capitalization of the company has grown from $6.8 billion in January 2001 to $30.1 billion today.”
But Daniel also took responsibility for Enbridge’s greatest failure, the July 2010 rupture of its line 6B, which spilled more than 20,000 barrels of oil into a Michigan river system.
Daniel remained on the scene for months to reassure local residents and oversee clean-up operations. But the incident has been a rallying point for those seeking to block Enbridge’s bid to build Northern Gateway.
The line is in the early stages of a two-year regulatory process and faces opposition from native groups and environmentalists concerned about potential spills.
Monaco, 52, joined Enbridge in 1995 and is responsible for its natural gas pipelines and its renewable power business. He previously headed Enbridge’s major projects, overseeing pipeline and power expansions.
“Given Mr. Monaco’s long tenure in executive positions within (Enbridge) and his considerable influence on (the company‘s) overall strategic business direction over the past several years, we believe he represents an excellent choice as the company’s next CEO,” Pierre Lacroix, an analyst at Desjardins Securities, said in a research note.
Daniel said Monaco was selected to replace him because of the variety of roles he’s played within the company, including running its retail natural gas distribution network centered in Ontario, as well as heading up investor relations.
“He’s pretty well done it all for us,” Daniel said.
Enbridge shares rose 40 Canadian cents to C$38.81 on the Toronto Stock Exchange on Monday.
Reporting by Scott Haggett and Euan Rocha in Toronto; editing by Janet Guttsman and Rob Wilson and Peter Galloway