Suncor partners with Total on oilsands
Last Updated: Friday, December 17, 2010 | 9:53 PM ET
Calgary-based Suncor Energy is entering a $1.75-billion strategic partnership with France's Total to share development of new oilsands projects in northern Alberta.
Suncor is Canada's largest energy company and Total is Europe's No. 3 oil producer.One of Suncor's minesites is shown in 2003. The Calgary-based firm has struck a $1.75-billion deal with French energy giant Total to share development of three new oil sands projects in northern Alberta. (Jeff McIntosh/Canadian Press)
The deal announced Friday means Total will expand its stake in Suncor's Fort Hills Project from 20 per cent to 39.2 per cent and get 49 per cent of Suncor's Voyageur upgrader project near Fort McMurray.
Beginning in early 2016, Voyageur is scheduled to process 200,000 barrels of oilsands crude a day, including bitumen from Total's share of Fort Hills and output from its own proposed Joslyn mine, which is under regulatory review and due to start in 2017 or 2018.
The deal will also have Suncor take a 36.75 per cent of Total's share in Joslyn.
The transaction is due to close by the end of March, assuming regulatory and other approvals.
The agreement was the latest example of growing foreign interest — especially by companies based in Asia — in western Canadian oil and gas properties.
Calgary-based consulting firm Sayer Energy Advisors said in a report in October that interest had picked up sharply compared with 2009, and that foreign firms accounted for 45 per cent of all large mergers, acquisitions and joint ventures — totalling almost $29 billion — in the first 10 months of the year.
Also Friday, Suncor announced it would increase production to more than one million barrels of oil equivalent per day by 2020, beginning with the company's 2011 capital spending plans.
Over the next 10 years, Suncor is targeting oilsands production growth of approximately 10 per cent per year and companywide production growth of approximately eight per cent per year.
"Today, we're announcing what we believe is the optimal plan for steady and manageable growth through 2020," said Rick George, president and CEO.
Key components of the plan include further development of the company's Firebag and MacKay River projects, investments and ongoing production in international and offshore operations.
Suncor also plans to continue investments in renewable energy projects, environmental impact mitigation and environment-focused research and development.
Capital spending plan approved
Supporting the first stages of the company's long-term growth strategy, Suncor's board of directors approved a $6.7-billion capital spending plan for 2011.
About $2.8 billion will be directed toward growth project funding, primarily at the company's oilsands operations.
Another $3.9 billion will sustain existing operations, including planned maintenance and further deployment of new tailings reclamation technology.
Corrections and Clarifications
- Suncor is acquiring 36.75 per cent of Total's share in the Joslyn project. An earlier version of the story incorrectly stated Suncor would get a 36.75 per cent share of the entire project. Dec. 17, 2010 | 7:50 p.m. MT
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