Suncor is purchasing French Energy giant, TotalEnergies EP Canada Ltd. (Total) Canadian operations.
The $1.468 billion acquisition means Suncor takes over Total’s 31.23 per cent working interest in the Fort Hills oil sands mining project (Fort Hills) and adds 61,000 barrels per day of net bitumen production capacity along with 75 million barrels of proved and probable reserves to Suncor’s portfolio.
“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,” said Rich Kruger, President and Chief Executive Officer.
“With 100% 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.
In April, Suncor had reached an agreement to acquire Total’s Canadian operations for $5.5 billion, encompassing Total’s Fort Hills interest and its 50% stake in the Surmont facility. However, ConocoPhillips, the operator of Surmont, exercised its right of first refusal to purchase Total’s stake rather than Suncor, leading to a reassessment of Suncor’s arrangement with Total.
Upon closing of this new transaction, Suncor will own all of Fort Hills, which along with its ownership of Firebag and MacKay River in-situ assets, gives the company additional long-life, physically-integrated bitumen supply for its Base Plant upgraders post the end of the Base Mine life.