Suncor Energy increases stake in Syncrude, acquires stake in Fenja Development

CALGARY — Suncor Energy Ltd. continued to consolidate its interest in Syncrude Canada’s oilsands mining operations on Thursday, announcing it would buy the five per cent stake owned since 1991 by Mocal Energy Ltd., a subsidiary of Japan-based conglomerate Mitsubishi Corp.

The purchase price of $920 million is slightly less than the $937 million Calgary-based Suncor paid for American Murphy Oil’s five per cent Syncrude stake in April 2016. It bought Canadian Oil Sands Ltd. and its 37 per cent stake in Syncrude for $6.6 billion in February 2016.

The Mocal agreement leaves the Syncrude consortium with just four partners. Canadians Suncor and Imperial Oil Ltd. hold 58.74 per cent and 25 per cent, respectively, while Chinese-owned Sinopec Oil Sands Partnership and Nexen Oil Sands Partnership have 9.03 per cent and 7.23 per cent.

Syncrude, which converts heavy sticky bitumen from open pit mines into a synthetic crude which fetches prices similar to U.S. benchmark West Texas Intermediate, has long been dogged with reliability issues.

“This transaction reflects our confidence in the long-term future of the oilsands and the high quality and value of the Syncrude asset, adding 17,500 barrels per day of high quality light sweet synthetic crude capacity to our portfolio,” said Suncor CEO Steve Williams in a statement.

Analysts say they expect Suncor to use its greater ownership to continue to push through integration and synergies with neighbouring Suncor oilsands operations near Fort McMurray in northern Alberta.

“In our view, this is a no brainer,” said Barclays analyst Paul Cheng in a report.

“Suncor already owns 54 per cent of Syncrude and has also been increasingly deploying their own personnel in the joint venture. This acquisition will not increase Suncor’s cost base but will allow the company to further leverage the benefit of any future improvements at Syncrude.”

Suncor also announced it had acquired a 17.5 per cent interest in the Fenja Development in the Norwegian Sea, about 30 kilometres southwest of the Statoil-operated Njord field, from Faroe Petroleum for about $68 million.

The Fenja field was discovered in 2014 and is expected to be developed via a subsea tie-back to the Statoil-operated Njord platform.

Production is planned to start in 2021 and Suncor’s share of go-forward capital is estimated to be $280 million. Partners in the development are the operator VNG Norge, Point Resources, Suncor and Faroe Petroleum.

Just Posted

Is the fate of Red Deer’s Parsons House solely in the hands of the province?

Demolition of old police station next door to begin this fall

Fundraiser to help keep kids warm in Blackfalds

Community Warmth Fall Fundraiser

Piper Creek Foundation gets a new name

Red Deer subsidized housing program for seniors

Reveen returns to Red Deer

Presented by Friends of Red Deer Regional Hospital

2019 Winter Games will transform Red Deer: Olympic organizer

Team leader behind 2010 Vancouver Winter Olympics provides inspirational pep talk

WATCH: Red Deer students take part in annual run

Dawe/St. Pat’s Run reaches 40th anniversary

Smile Cookie fundraiser campaign for Reading College kicks off

Fundraising campaign runs Sept. 12-18 for program that helps children improve their reading

‘Nightmare that won’t end’: Storm evacuees can’t return yet

WILMINGTON, N.C. — Hundreds of people waited in long lines for water… Continue reading

New bridge collapses into river in rural Saskatchewan hours after opening

HYAS, Sask. — A rural politician in eastern Saskatchewan says he’s at… Continue reading

Halifax researchers tag great white shark in Atlantic Canada for first time

HALIFAX — For the first time in Atlantic Canadian waters, scientists have… Continue reading

Liberal riding association president blindsided by MP’s defection

OTTAWA — The president of an Ontario Liberal riding association says he… Continue reading

Pope gives bishops more decision-making options

VATICAN CITY — Pope Francis decreed on Tuesday that ordinary Catholics should… Continue reading

Hurricane rating system fails to account for deadly rain

TRENTON, N.C. — When meteorologists downgraded Hurricane Florence from a powerful Category… Continue reading

Glad company: Trailer for Disney’s ‘Mary Poppins Returns’

LOS ANGELES — A beloved nanny is preparing to take to the… Continue reading

Most Read