Suncor boss outlines $ 25M savings plan

The most notable recent hostile takeover in the Canadian oil and gas sector occurred in January 2010 when Tormont Industries of Toronto completed a sweetened $ 672- million takeover of Enerflex Systems Income Fund Systems after the oilfield services firm rejected an initial stock- and- cash offer as not reflecting the value of company.

When Canadian Oil Sands eventually paid $ 165 million for Canada Southern Petroleum in 2006, Canadian Superior Energy had also made a takeover offer after Petro- Canada put the company, and its rights to natural gas reserves in the Arctic, in play.

It was almost a decade earlier when CanOxy, now Nexen Energy, trumped Talisman, now part of Repsol, with its $ 1.5- billion offer for Regina- based Wascana.

Suncor has said for months it was looking to take advantage of the sharp downturn in oil prices to acquire assets at bargain prices, and after spending $ 310 million to acquire a larger stake in the Fort Hills oilsands mine from French energy giant Total in September, it moved early Monday to double down on oilsands through Syncrude.

The total transaction, including Canadian Oil Sands’ debt, is valued at $ 6.6 billion and the offer is on the table until Dec. 4.

As a holding company, Canadian Oil Sands has fewer than 30 employees. The 20- year- old company received 77,000 barrels a day of Syncrude’s light synthetic crude in the second quarter that sold for $ 74.47 a barrel. It had operating costs of $ 52.63 a barrel.

Suncor, whose work at Fort McMurray dates to the Great Canadian Oil Sands project in the 1960s, produces 581,000 barrels a day of oil along with refineries and retail outlets across Canada.

In a statement, Williams identified $ 25 million in annual savings in overhead as well as “the opportunity for an increased level of input from Suncor in the ongoing operations of Syncrude.”

National Bank Financial — which listed Imperial and its parent, Exxon, as a potential rival bidder — cautioned about “the high cost and unreliable nature of the project” that recently returned to production after a fire in August. Imperial, which signed a 10- year deal to manage Syncrude in 2006, had no comment Monday.

Williams said Imperial is the only other natural bidder for Canadian Oil Sands. Imperial has a regal air to its name, but whether it will assume the role of white knight is another matter entirely.