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Equinor has signed a deal to buy for $850 million the UK assets of Canada’s Suncor Energy, including a stake in a massive producing oil field and an interest in one of the major planned developments in the UK North Sea.
The transaction, subject to relevant regulatory approvals, includes Suncor Energy’s 29.89% non-operated interest in the producing Buzzard oil field, a 40% operated interest in the Rosebank development, and Suncor employees based in the UK who work with these assets, Equinor said on Friday.
The Buzzard field, operated by CNOOC International, is currently producing at approximately 60,000 boepd. Buzzard is the biggest supplier to Forties, one of the crude grades in the Brent Crude benchmark.
At Rosebank, which Equinor operates, the company expects recoverable resources at around 300 million barrels of oil. With the acquisition of Suncor’s UK assets, Equinor will have 80% in the Rosebank development, while Ithaca Energy holds the remaining 20%. Equinor and partners target a final investment decision for Rosebank this year, amid increased tax rates for operators in the UK North Sea and strong opposition from environmentalists to the development of Rosebank and other major oil and gas fields in the North Sea such as Cambo.
“This transaction is in line with Equinor’s strategy of optimizing our oil & gas portfolio and deepening in our core countries,” said Philippe Mathieu, executive vice president for Exploration and Production International.
“We are building on our longstanding position as a broad energy partner to the UK, strengthening our position as a reliable energy provider in Europe, while continuing to deliver on our ambition of becoming a net-zero company,” Equinor’s executive added.
The Equinor-Suncor deal comes at a difficult time for operators in the UK North Sea, which have seen their tax rates hiked last year after the UK government introduced – and then increased – a windfall tax on operators offshore the UK.
Earlier this week, the new head of trade body Offshore Energies UK (OEUK) warned that the windfall tax, officially known as the Energy Profit Levy (EPL), is hitting all companies operating on the UK Continental Shelf, with firms already announcing lower investments and deferring drilling plans.
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.