CEO backgroundSource: OIL & GAS INQUIRER
Oilsands
Opti's New CEO Looks To Its Future
By Deborah Jaremko
![[Figure 1]](https://www.dobmagazine.nickles.com/article.asp?article=magazine%2F090727%2FMAG2009%5FLR000000%2Ejpg)
It's a chilly spring morning in downtown Calgary, one that becomesquiet as I step off the elevator onto the 21st floor of Selkirk House, enteringthe offices of Opti Canada. There is no receptionist, and the only person insight is the photographer meeting me there for today's chat with thejunior oilsands developer's new president and chief executive officer. Alarge pile of bankers' boxes sits near the door, all on their way toNexen's offices a few blocks away.
At this time last year, Opti was the operator of the soon-to-be fourthintegrated oilsands upgrader to come on stream in the world. Now its 50-50 stakein the Long Lake joint venture with Nexen has dropped to a minority share.
But as Christopher Slubicki enters the boardroom, he is full of confidence,eager to share why he believes Opti can make it through the financial challengesof the coming months and come out unscathed by those that-if one believesthe rumours-would like to seize its control.
Last November, not long after the integrated Long Lake steam assisted gravitydrainage (SAGD) project celebrated its grand opening, Opti announced theappointment of TD Securities to review its options for future funding, includingasset sales, new debt, and/or equity. Slubicki notes that while it was not asurprise that the company needed to raise more money, it faced a more difficulttime doing so during a global financial crisis.
"We always knew we would have to raise more equity. [Last fall] thatdoor was closed to us," he says. "It was no ordinaryautumn."
The answer was "a very large transaction"-the sale of 15per cent of Opti's 50 per cent stake in Long Lake, and operatorship of theupgrader, to Nexen. The sale, which generated $735 million for Opti, alsoreduced its employee base from 350 to 21. However, the net loss to the Long Lakeproject is minimal-Slubicki says virtually all 220 of the operations staffat site transferred over to Nexen, and in total about 280 of the previous 350staff members are still working on the project. Opti's new boss-whoat the time was on the company's board of directors, leading the specialcommittee for the Nexen transaction-says the decision was not an easyone.
"From a financial and business point of view, it was the right thing todo. From an emotional standpoint, it was a very hard thing to do. This companywas formed to build and operate upgraders, and we're not doing thatanymore."
The road to Opti's helm
Slubicki, a mechanical engineer, started out in field operations withChevron, spending 18 months on drilling rigs near Zama, Alberta, and thenanother 18 months near Slave Lake, Alberta. He then moved on to Placer CegoPetroleum, running drilling and completions workovers until Amerada Hessacquired the company in 1990. At that time, he was completing an MBA at theUniversity of Calgary, and saw a new opportunity in his path.
"I always had an interest in the business side," he says."I wanted some varied experience."
At about age 29, single, and ready to take some risks, Slubicki and threepartners started the company Waterous & Co.
"Our strategy was to be a mergers and acquisitions advisory boutique,focusing on one aspect of one business, organizing divestitures of companies inoil and gas. Today, that's common practice, but at the time it was a newapproach."
He says Waterous also brought technical expertise to the business.
"All our buyers were technical. Our staff was geophysicists,geologists, engineers."
He explains that until about 1995-96, the company "struggledalong," but then started to get some legs. As with many small companies,he notes, "it took us seven years to become an overnightsuccess."
Slubicki left the company after it was sold to the Bank of Nova Scotia in2005, leaving behind a role that saw him spend much of his time outside ofCanada. He says the vast majority of his work was international, getting andexecuting mandates around the world. By this time he had a young family and wasspending just one or two business days in the Calgary office each month.
"It just wasn't the lifestyle I wanted to lead. It was time forthe next chapter."
He decided to take a year off, "disciplining" himself to stayaway from work other than serving on boards such as Opti's, which hejoined in February 2007. But it turned out taking time off wasn't asdifficult as he would have thought, finding lots to do such as sailing theAtlantic Ocean and learning to speak French.
"I still had a lot of things I wanted to do, so I took a second year. Icould have taken a third."
But he didn't. Last summer, Slubicki turned 50 and decided to get backto it, but says "nothing really got my adrenaline going," and so hekept turning things down.
And then the Opti opportunity came about. As he was already a highly activeboard member who had officed with the company, knew many of the people, and feltthere was a strong asset base, he jumped on the chance, officially taking on theleadership role in March.
"We faced some challenges," he says. "The adrenaline gotgoing. It was a pretty easy decision."
Where to go from here
Almost immediately after Slubicki's new appointment was announced,media reports surfaced that the management shift from that of Sid Dykstraprobably indicated that the company would soon be for sale. And it wasn'tjust the media-it was even his friends.
"It's not just strangers that thought that. It caught me offguard," Slubicki says, "[They thought since] I was in thetransaction business for 17 years, ergo a transaction is imminent."
The reality is, he explains, "I spent 17 years building a singlecompany. We just happened to do transactions. I've always been a long-termthinker, and I continue to be a long-term thinker."
And, he notes that as an oilsands project Long Lake has a significant reservelife.
"We all will live a long time, but this project will livelonger."
Even though Opti is no longer playing an operator role in Long Lake, he saysthe company's asset remains strong. When the project reaches full designcapacity of approximately 58,000 barrels per day of products-expected bylate 2010-Opti will boast just over 20,000 barrels per day of syntheticcrude production.
"When we get up to full volumes next year, even at [$50] we have a veryviable and sustainable company," Slubicki says. "Our challenge is tomanage our financial situation during that period."
Even though Opti may not be up for sale, it won't necessarily stay outof play.
"We can't stop anybody from doing anything. Every one of us is apotential target," he says. "It's business as usual in themeantime. Every CEO is in the same boat. Perform well, keep your share price up,and it's your best defence."
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