Suncor to buy out Total, gain 100% of Fort Hills oil sands

Suncor Energy (TSX:SU; NYSE:SU) has offered $1.47 billion to buy out all of Total Energies EP Canadian operations. Total’s assets include a 31.23% working interest in the Fort Hills oil sands project in northern Alberta. With this deal, Suncor will own 100% of the project.

Suncor cites two reasons for the offer. First, it adds 61,000 bbl/d of bitumen production capacity and 675 million bbl of 2P reserves to its portfolio. Second, it secures a long-term bitumen supply.

"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, Suncor president and CEO. "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."

The company assured the public that the acquisition will be subject to its objective of achieving net-zero greenhouse gas emissions from operations by 2050.

The Fort Hills mine began production in 2018 after a $13.5-billion investment from partners Suncor (40.8%), Total (39.2%), and Teck Resources (20%). In 2015 before production began, Total sold part of its interest for $310 million, to Suncor. Teck divested its interest in 2022 for $1 billion, boosting Suncor’s interest this time to 68.76%.

The project has a nameplate production capacity of 194,000 bbl/d. Based on current mine plans, it will be in operation for 50 years. Fort Hills is located 90 km north of Fort McMurray, Alta.

For more information about Fort Hills and Suncor’s sustainability initiatives, visit the company’s website.