The Bloomberg interview with Geeta Sankappanavar, president of Calgary-based pri

Question

The Bloomberg interview with Geeta Sankappanavar, president of Calgary-based private investment firm Grafton Asset Management. In the video she discusses the self-imposed challenges Canada is creating for itself in the oil and gas sector, and why policy needs to change in order to give the industry a fighting chance against global rivals.

1. How has Grafton's business model changed due to the opening of boarders?

2. How does Grafton embrace diversity?

what is the difference between vertical and horizontal FDI(Foreign Direct Investment)? Describe one example of an industry for each type.

Explanation / Answer

1.      How has Grafton's business model changed due to the opening of borders?

·         They had to face an extremely bad price crash. Despite the recovery, the prices are half of the 2014 prices. They have decided to add alternative fuels to their existing portfolio. The plan to add other environmentally friendly and renewable power projects in Canada. They are also planning to add natural gas plants and biomass facilities. Further, they will attract capital from global investors primarily from the Middle East, Europe, and the US to diversify its existing portfolio and its asset base.

2.      How does Grafton embrace diversity?

·         They plan to diversify their portfolio of $1 billion, which is currently invested 90% in Canadian oil and gas sector and 10% through their equity funds. They plan to differentiate and diversify into natural gas and biomass facilities. They plan to avoid investing in assets, which are already in production. They will focus on assets, which will start giving returns in 3 to 5 years time.

They have a partnership with Tourmaline oil corp. The tourmaline oil corp own 25% of Peace River high project, also have a joint venture with Bellatrix exploration limited. They also have interests in a shale formation startup in Alberta and British Columbia.

3.      What is the difference between vertical and horizontal FDI (Foreign Direct Investment)? Describe one example of an industry for each type.

“FDI is a key feature for global economic integration. It means creating a lasting business interest in a business in another country. It creates a say in the management of the organization and also builds a rapport between the investor and the investment.”

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.