- Suncor Energy (TSX:SU) will purchase TotalEnergies’ interest in the Canadian oil sands for C$1.468 billion
- The acquisition adds 61,000 barrels per day of net bitumen production capacity and 675 million barrels of proved and probable reserves to Suncor’s oil sands portfolio
- Suncor Energy is a Calgary-based integrated energy company and the world’s largest producer of bitumen
- Suncor Energy stock (TSX:SU) has fallen by 13.61 per cent over the past five years
Suncor Energy (TSX:SU) will purchase TotalEnergies’ interest in the Canadian oil sands for C$1.468 billion.
France’s TotalEnergies is a global energy company producing oil, biofuels, natural gas, green gases, renewables and electricity. It’s active in almost 130 countries and employs more than 100,000 people.
The purchase includes Total’s 31.23 per cent working interest in the Fort Hills oil sands mining project, which currently yields 194,000 barrels per day of nameplate production and is expected to have a 50-year mine life. Once the transaction closes, Suncor will be Fort Hill’s sole owner.
The acquisition adds 61,000 barrels per day of net bitumen production capacity and 675 million barrels of proved and probable reserves to Suncor’s oil sands portfolio.
In conjunction with its ownership of the Firebag and MacKay River in-situ assets, Fort Hills strengthens Suncor’s bitumen supply and enhances the use of its wholly owned Base Plant upgraders once its largest oil sands mine, The Base Mine, winds down in the mid-2030s.
The companies expect the transaction to close on April 1, 2023. Negotiations began in April 2023 after the initial sales agreement, with oil running up from US$72 to US$83 per barrel in the intervening period.
The transaction originally included Total’s 50 per cent stake in the Surmont project near Fort McMurray, Alberta, but the project’s operator and equal owner, ConocoPhillips, exercised its right of first refusal on Total’s stake.
“The transaction secures additional long-term bitumen supply to fill our Base Plant upgraders at a competitive supply cost, addressing a key uncertainty for the company and adding long-term shareholder value,” Rich Kruger, president and CEO of Suncor, said in a statement.
“With 100 per cent ownership of Fort Hills, we will pursue opportunities to create additional value through regional synergies and basin-wide management of our unparalleled, integrated oil sands asset base. This transaction is aligned with our strategy to wholly own and operate long-life strategic assets,” he added.
Suncor Energy is a Calgary-based integrated energy company focused on oil sands development, production and upgrading, offshore oil and gas, petroleum refining in Canada and the U.S., and its Petro‑Canada retail distribution network.
Suncor Energy stock (TSX:SU) last traded at $43.78 per share. The stock has fallen by 13.61 per cent over the past five years.
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