Canada off list on taxes, regulations

“For our international offshore, it’s about leveraging our long-life, low-decline assets that we have in the oilsands with a highly profitable focused offshore business in geographic regions where we already have assets and expertise,” said Suncor spokesperson Sneh Seetal.

She said more deals offshore dorway and offshore U.K. could be a fit given those qualifiers. “We’d always be evaluating any of those opportunities to see if they’d be a strategic fit with our portfolio,” Seetal said.

Suncor aims to spend $280 million in capital on the project, as part of its 17.5-per-cent stake in U.K.based Faroe Petroleum PLC’s stake in the Faroe offshore field, which was discovered in 2014 and is expected to be producing oil by 2021.

The Fenja deal marks Suncor’s first international acquisition since 2016, when it acquired a stake in an offshore U.K. project called Rosebank, operated by Chevron Corp. That project has yet to be sanctioned but is expected to produce 100,000 barrels of oil per day and 80 million cubic feet of natural gas per day.

In recent years, Suncor has sold off in Trinidad and Tobago, while the company’s Middle East ventures have soured, with its Syrian and Libyan assets deemed too dangerous to produce safely.

Suncor president and CEO Steve Williams had said on an earnings call last week that Suncor would consider using its cash flow from the oilsands to make acquisitions. The company had about $2.7 billion of cash on hand by the end of December, according to S&P.

Williams also said the company would not sanction new major projects in Canada without governments easing the regulatory and tax burden on companies, which he said had made Canada uncompetitive.

“We’re having to look at Canada quite hard. The cumulative impact of regulation and higher taxation than other jurisdictions is making Canada a more difficult jurisdiction to allocate capital in,” Williams said.

“Absent some changes and some improvement in competition, you’re going to see us not exercising the very big capital projects that we’ve just finished,” Williams said, referring to the $17-billion Fort Hills oilsands project the company had just brought online.