Environment & Safety Gas Processing/LNG Maintenance & Reliability Petrochemicals Process Control Process Optimization Project Management Refining

ConocoPhillips to buy rest of Canada's Surmont oil site, bumping Suncor

(Reuters) - ConocoPhillips said on Friday it was buying the 50% stake in the Surmont oil facility held by TotalEnergies' Canadian subsidiary for about $3 B, giving it full ownership and elbowing away rival Suncor Energy.

Canada's Alberta oil sands hold some of the world's largest crude reserves, which appeal to cash-flush producers looking to bolster production.

Suncor last month agreed to buy TotalEnergies’ Canadian operations for $4.11 B, including Total's 50% stake in Surmont, which ConocoPhillips operates.

But ConocoPhillips, which held the other 50% stake, held right of first refusal to buy the rest of Surmont. Conoco's decision to exercise that right is a setback to Suncor's plans to boost its long-term bitumen supplies to replace its aging Base Mine.

Suncor, in a statement, said its deal with Total was conditional on ConocoPhillips waiving its right of first refusal, and it is now re-assessing the transaction.

Conoco's pending decision had stirred speculation about whether it would exercise its option, but investors seemed to favor buying Surmont, given its returns, RBC Capital Markets said in a note.

Conoco shares eased, while Suncor stock was down 1.3%.

ConocoPhillips expects the transaction to add about $600 MM of annual free cash flow in 2024.

The deal, expected to close in the second half of 2023, will be funded either through cash, short- and medium-term financing, or a combination, ConocoPhillips said.

Related News

From the Archive

Comments

Comments

{{ error }}
{{ comment.name }} • {{ comment.dateCreated | date:'short' }}
{{ comment.text }}