Suncor Energy Inc. (NYSE:SU) has finalized its strategic alliance with Total E&P Canada Ltd. after receiving all required approvals and successfully meeting all other conditions.
"This agreement with Total is an important element of Suncor's plans to accelerate development of its growth portfolio and more than double our oil sands production by 2020", said Kirk Bailey, executive vice-president, Oil Sands Ventures. "Together, we will be able to pool our manpower and capital resources and bring our collective strengths to bear to manage projects using best-in-class operating practices."
Under the terms of this agreement, first announced on December 17, 2010, Suncor acquired a 36.75% working interest in the Total-operated Joslyn joint venture with Total now holding 38.25%, Occidental Petroleum holding 15% and Inpex Canada Ltd. holding 10%. Suncor will also receive approximately $1.75 billion from the transaction.
Total acquired a 49% interest in Suncor's Voyageur upgrader and upon completion, Suncor will operate the planned 200,000 barrel per day facility. Total also acquired a portion of Suncor's interest in the Fort Hills oil sands project resulting in Suncor now holding a 40.8% interest, Total holding 39.2%, and Teck Resources Ltd. holding the remaining 20%.
Suncor and Total have agreed to develop the Fort Hills mine and Voyageur upgrader in parallel, so that both come on stream in 2016. The companies have also confirmed the Joslyn North Mine timetable, with production expected to begin in 2017-2018, subject to receiving the necessary permits and approvals.
Execution of the Fort Hills and Joslyn projects, as well as the continued construction of the Voyageur upgrader, is subject to sanction by the partners in these ventures and requires approval by Suncor's Board of Directors.