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In the aftermath of the American drone attack that killed Iran’s senior military leader, the media has been scrambling to find angles and tidbits to turn into articles that will give this story legs.
One is a Forbes piece on the man who invented the drone that was used to conduct the attack. And that story line gives it something of a Saskatchewan connection – a bit tenuous to say the least, but a connection to significant private business figures who crossed paths in another chapter of their stories. It offers a glimpse into the world of local players who do things that affect global affairs.
Neal Blue, the man who created the Predator drone, a La Jolla, Calif., entrepreneur and self-made billionaire, was the centrepiece of a story the Forbes writers were working on. Blue owns 80 per cent of General Atomics, which Forbes says makes him worth more than $4 billion. His brother Linden owns the remainder. Both men are media shy, not having given much in the way of interviews in years.
I, however, was fortunate to get one, sitting down with him at his campus across the road from the famed Torrey Pines golf course.
The Sunday afternoon interview he granted was to contribute to a book I had been commissioned to write to mark the 100th anniversary of the formation of the Hill Group of Companies in Regina. Blue had partnered up with the Hills in the early 1980s, a development that was largely the doing of Pierre Elliott Trudeau.
Like Blue, who may be media shy but is a sponge for information, Hill devoted considerable time and energy to going to conferences simply to learn. More often than not they learned something, but it wasn’t always useful information.
The trick in this, however, is that you never know what is useful and what isn’t until after the fact or how something with little value today can become extremely precious tomorrow if circumstances change.
Enter Trudeau and his National Energy Policy in 1982. A significant element of that legislation, an act that gutted the Prairie economy and the memory of that devastation is largely the trigger for the Prairies’ rejection of Trudeau’s son in last fall’s election, was that oil production had to be conducted by firms that were majority Canadian-owned.
For the global players who were active at the time, it was like being kicked out of a banana republic as their assets were forced onto the auction block at fire sale prices.
It was a story on this carnage carried in the Wall Street Journal that caught Blue’s eye. A successful business master of the art of buy-low-sell-high, he smelled a deal.
World-class Alberta assets owned by Tenneco Oil were being thrown onto the market at bargain prices resulting from political – not economic – forces meant there was commercial blood in the streets and he saw a chance to buy.
But, as an American, he would have to jump through some hoops to take advantage of the opportunity north of 49th. Namely, he needed a Canadian partner. And he found his answer in Regina.
“The only Canadian I had ever met was Fred Hill,” Blue said in that interview. “We met at a banking conference in Bermuda.”
That chance meeting had just become a precious tidbit prompting him to call Hill and propose they pursue acquiring these distressed oil and gas assets. It is a powerful reminder to all of us that knowledge is power: You just never know where or when something you learn or someone you meet today might be helpful down the road.
Hill, who had been in the oil business once before and had found little success, was less than excited about returning to the industry, but Blue’s request was simply too interesting to ignore. He accepted the offer and they pursued the prospect.
In the end, a very complex business arrangement was created that gave Hill majority ownership, but with Blue footing the majority of the bill he had to be paid out accordingly.
Nonetheless, with the assistance of virtually every major law firm in Western Canada, Harvard International Petroleum – now Harvard Energy – was born in 1982 and continues to operate from its Calgary headquarters today.
Image source: General Atomics
