TotalEnergies finalizes sale of Canadian oil sands assets to Suncor for over $1bn

TotalEnergies has successfully completed the sale of TotalEnergies EP Canada Ltd. to Suncor, encompassing its stake in the Fort Hills oil sands asset and related midstream commitments. The transaction is valued at approximately US$1.1 billion (C$1.47 billion), with the deal becoming effective on April 1st, 2023. Following adjustments, TotalEnergies received C$1.83 billion (around US$1.3 billion) in cash at closing.

Deal Details:

• Transaction Overview: TotalEnergies’ divestment from the Canadian oil sands includes the full transfer of shares of TotalEnergies EP Canada Ltd. to Suncor.
• Financials: The finalized deal amounts to approximately US$1.1 billion, with TotalEnergies receiving an adjusted cash payment of US$1.3 billion.
• Previous Sale: Earlier in October, TotalEnergies completed the sale of a 50% interest in Surmont and related assets to ConocoPhillips, receiving US$2.75 billion and up to US$330 million in contingent payments.

Statement from TotalEnergies’ CFO:

Jean-Pierre Sbraire, CFO of TotalEnergies, highlighted the strategic exit from the Canadian oil sands, focusing on lower breakeven oil and gas assets. He noted the significant capital received from these sales, amounting to over US$4 billion in Q4 2023, with a portion allocated to shareholder buybacks.

Suncor’s Gain:

With this transaction, Suncor now holds complete ownership of the Fort Hills Project in Alberta’s Athabasca region. The acquisition increases Suncor’s net bitumen production capacity by 61,000 barrels per day and adds 675 million barrels to its proved and probable reserves.

Additional Impact:

• Deal Background: Announced in October 2023, the acquisition aligns with Suncor’s long-term strategy and its commitment to achieving net-zero greenhouse gas emissions by 2050.
• Suncor’s Integrated Assets: The acquisition complements Suncor’s ownership of Firebag and MacKay River in-situ assets, enhancing its bitumen supply capabilities.

Conclusion:

TotalEnergies’ divestment from the Canadian oil sands sector, culminating in the sale to Suncor, represents a significant shift in the industry. This move aligns with TotalEnergies’ strategy of capital allocation to more sustainable and lower breakeven assets, while Suncor expands its portfolio and reinforces its commitment to sustainable energy goals.