BP is divesting its last interest in Canada’s oil sands to Canadian firm Cenovus Energy as part of a portfolio reshaping that will see it buy into an offshore oil project in eastern Canada.
BP has agreed to sell its 50-percent interest in the Sunrise oil sands project in Alberta to Cenovus Energy, the UK supermajor said in a statement on Monday.
BP’s exit from Canada’s oil sands follows other divestments from one of the most carbon-intensive oil production types, such as the ones that Shell and Equinor have made in recent years, as international oil majors look to lower their emissions profile under intense pressure from investors and campaigners.
As part of its net-zero plan, BP has said its oil and gas production would decline by 40% by 2030 through active portfolio management.
After the oil sands exit, BP is not abandoning the Canadian oil sector and is shifting its focus to future potential offshore growth. As part of the deal with Cenovus, the UK major will buy the Canadian firm’s 35-percent interest in the undeveloped Bay du Nord project offshore Newfoundland and Labrador. The deal includes 467 million (C$600 million) in cash, a contingent payment with a maximum aggregate value of C$600 million expiring after two years, and Cenovus’s 35-percent position in Bay du Nord.
The project Bay du Nord is led by Norway’s Equinor and received in April this year a positive environmental assessment by the Government of Canada. The project has yet to take a final investment decision, with first oil expected to be produced in the late 2020s.
“This is an important step in our plans to create a more focused, resilient and competitive business in Canada. Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio offshore Newfoundland and Labrador,” said Starlee Sykes, bp senior vice president, Gulf of Mexico & Canada.
Currently, BP holds an interest in six exploration licenses in the offshore Eastern Newfoundland Region.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.