Vermilion Energy CEO says ‘leave’ vote would be a mistake for Britain

CALGARY – A Calgary CEO whose oil and gas company has extensive holdings in Europe says he thinks it would be a mistake for Britain to vote to leave the European Union in the so-called “Brexit” vote on Thursday.

But Tony Marino of Vermilion Energy (TSX:VET) added Wednesday that he doesn’t think a “leave” vote would have a big impact on his company, which produces about half of its oil and gas in European countries including Ireland, the Netherlands, Germany and France.

“I think (remaining) will give Europe greater stability and it’s probably good for the overall European economy. That’s my view,” he said.

“I think, to me, it’s in the U.K.’s interest to stay in and I think it’s in Europe’s interest as well.”

Marino said some of Vermilion’s natural gas production is sold based on a British commodity index and therefore priced in pounds, but the value is based on demand for the fuel from Europe as a whole and wouldn’t likely suffer if the pound falls after the vote.

Jason Langrish, executive director of the Canada-Europe Roundtable for Business, said Canada’s energy exports will probably gain favour in the United Kingdom if it votes to leave the EU.

“If the U.K. were to leave, I could see a real appetite for sourcing Canadian energy,” he said. “I could see the U.K. being quite keen on a deepened relationship with Canada, including on the energy side of the equation.”

Langrish said Britain’s trade focus will likely shift to Canada and other Commonwealth countries if European ties are snipped and that Britain’s interest could extend to investing in liquefied natural gas exports from Canada.

Meanwhile, the British would be less likely to discriminate against Canadian energy products over environmental issues, he said, recalling the five-year battle won by Canada last year to eliminate a “dirty oil” label attached to oilsands crude under the European Union’s proposed fuel quality directive.

Langrish said the U.K. economy could be damaged if it votes to leave the EU, thus reducing overall trade, but added that a lower value for the pound could present an less expensive opportunity for Canadian companies to enter the British marketplace.

Langrish’s organization represents private sector groups that support free trade deals with Europe.

John Ries, a professor specializing in international trade at the University of British Columbia, pointed out Canada’s merchandise trade with Britain is small, with exports of about $16 billion to Britain and imports to Canada of $9 billion in 2015.

He said he didn’t expect a “leave” vote to significantly change Canada’s trade access to either Britain or Europe.

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