Suncor adds North Sea stake

Also expands Syncrude holdings

CALGARY • Suncor Energy Inc. doubled down on its Syncrude oilsands stake, adding Mocal Energy Ltd.’s five per cent interest in the project for $920 million. But the company announced a small but significant deal to buy a stake in a North Sea project, underscoring CEO Steve Williams’ recent comments of deploying capital in other jurisdictions.

Canada’s largest energy company by market cap boosted its stake in the Syncrude oilsands mine and upgrader to 58.74 per cent in a joint venture that includes Imperial Oil Ltd., and Chinese companies Sinopec Oilsands Partnership and Nexen Oilsands Partnership.

Suncor now owns around 555,590 barrels per day of oilsands upgrading capacity, which makes its the single largest Canadian producer of synthetic crude oil, according to S&P Global Ratings.

Japanese firm Mocal Energy’s divestment also marks the departure of yet another international oil company from the oilsands.

In the past couple of years, Conoco Phillips, Royal Dutch Shell Plc, Total SA and Statoil have sold off all or majority of their Alberta assets, primarily to Canadian operators.

But for Suncor, the deal was a 'no brainer’, as it already owned nearly 54 per cent of Syncrude and “has also been increasingly deploying their own personnel” to the project, according to Barclays analyst Paul Cheng.

“The purchase price also compares favourably to the company’s last acquisition of a 5 per cent interest from (Murphy Oil Corp.) for $937 million, announced in Apr. 2016 — which was near the bottom of the crude price cycle,” Cheng wrote.

While considerably smaller, Suncor’s $68 million deal to buy into a prospective oil project offshore Norway called Fenja is a step to diversify from the oilsands.