Suncor also buys 17.5% interest in Fenja Development in the Norwegian Sea from Faroe Petroleum for Cdn$68 million

Suncor Energy says it has reached an agreement to acquire Mocal Energy’s 5 per cent interest in the Syncrude oil sands joint venture for US$730 million, or approximately Cdn$920 million, according to a Suncor press release.  The transaction is effective as of Jan.1, 2018 and anticipated to close in first quarter of 2018.

“This transaction reflects our confidence in the long-term future of the oil sands and the high quality and value of the Syncrude asset, adding 17,500 barrels per day of high quality light sweet synthetic crude capacity to our portfolio,” said Steve Williams, president and chief executive officer.

Through this transaction Suncor’s share in the Syncrude joint venture will increase from 53.74 per cent to 58.74 per cent. Subsequent to the successful close of this transaction, the joint venture partners will be Suncor (58.74 per cent), Imperial Oil Resources (25 per cent), Sinopec Oil Sands Partnership (9.03 per cent) and Nexen Oil Sands Partnership (7.23 per cent).

“We will continue to work closely with our joint venture partners and the operator, Syncrude, to accelerate performance improvements and seek regional synergy opportunities,” said Williams.

Suncor also announced the acquisition by its wholly owned subsidiary, Suncor Energy Norge AS, of a 17.5 per cent participating interest in the Fenja Development in the Norwegian Sea from Faroe Petroleum for US$54.5 million, or approximately Cdn$68 million, subject to closing adjustments.

The transaction is a strategic fit within the Suncor offshore portfolio adding a de-risked project that is expected to provide profitable growth in an area where Suncor has existing knowledge, expertise and assets, the company says.

The Fenja field was discovered in 2014, in the Norwegian Sea, approximately 30 kilometres southwest of the Statoil-operated Njord field. The development concept is a subsea tie-back to the Statoil-operated Njord platform. Production is planned to start up in 2021. Suncor’s share of go-forward capital is estimated to be Cdn$280 million, based on the operator’s gross projected development cost of NOK 10.2 billion.

The transaction is subject to customary closing conditions and regulatory approvals as well as approval of the Fenja Plan for Development and Operation (PDO) by the Norwegian Ministry of Petroleum and Energy. Subsequent to the successful close of this transaction, the joint venture partners will be operator VNG Norge (30%), Point Resources (45%), Suncor (17.5%) and Faroe Petroleum (7.5%).