NorthAmOil: Suncor to buy TotalEnergies’ oil sands assets for $4.1bn

Suncor Energy has agreed to acquire TotalEnergies’ Canadian operations for CAD5.5bn ($4.1bn), plus additional potential payments up to an aggregate maximum of CAD600mn ($447mn). The aggregate is conditional upon Western Canadian Select (WCS) benchmark pricing and certain production targets.

The transaction would include TotalEnergies’ remaining 31.23% working interest in the Fort Hills oil sands mine and a 50% working interest in the Surmont in situ asset. Both projects are located in northern Alberta. However, ConocoPhillips owns 50% of Surmont, and may want to buy the remainder itself. It has a right of first refusal. 

TotalEnergies announced that it was planning to spin off the assets in September 2022. France-based TotalEnergies has been seeking to lower the carbon dioxide (CO2) emissions from its operations. Oil sands mining is more carbon-intensive than conventional oil and gas production and thus represented a relatively easy target as the company pivots to less emissions-intensive operations.

"We are not the best shareholder of these assets because as we have a climate strategy, we don't want to invest in these assets," said TotalEnergies’ CEO, Patrick Pouyanne, in September. The purchase will add 135,000 barrels per day (bpd) of bitumen production capacity and 2.1bn barrels of reserves to Suncor’s portfolio.