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While everyone in Big Oil seems to be divesting to stay afloat, Suncor has agreed to their third large acquisition this year, after ramping up its interest in Canadian oil sands with two earlier purchases: Canadian Oil Sands for $5 billion, giving them a 48% stake in Syncrude, and then topping it off with another 5% stake in the Syncrude with a US$716 million purchase from Murphy Oil.
This time around, Canada’s Suncor has shifted focus out of Canada’s oil sands, agreeing to buy a 30-percent stake in the Rosebank oil and gas project in the North Sea for an initial consideration of US$50 million, with an additional US$165 million if the project, which is in the final stages of engineering and design, gets the go-ahead by all the participating partners.
The seller is UK’s OMV Limited—a subsidiary of Austrian OMV.
The project’s operator is Chevron, with 40 percent, and DONG E&P holds a 10 percent interest. After the sale to Suncor, OMV will have 20 percent left in the project. According to Chevron, the deepwater project has the potential to unlock a sizeable portion of the UK’s undeveloped hydrocarbon reserves in the North Sea.
Despite falling into the red in the second quarter of the year because of the May wildfires that forced it to suspend production for a while, Suncor seems upbeat about the future. It’s been praised by some for its efficiency and smart acquisitions that could turn it into a big winner should oil prices rebound to any meaningful degree. Others, however, are skeptical about the sensibility of its major involvement in oil sands.
This deal with OMV now is a clear indication that the Canadian major is not betting only on oil sands. The Rosebank field has a designated initial output of 100,000 barrels of crude and 80 million cu ft of natural gas daily. It sports several production and injection wells, a floating production, storage, and offloading vessel, and will also feature a gas transportation pipeline.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.