3:02 AM
Total, Suncor in $1.8 billion oil sands deal
Addison Ray
PARIS | Fri Dec 17, 2010 4:15am EST
PARIS (Reuters) - France's Total (TOTF.PA) said on Friday it would spend C$1.75 billion ($1.8 billion) to forge a partnership with Suncor Energy (SU.TO) in Canada's oil sands, the latest foreign push into a booming source of oil wealth.
The French oil giant and Canada's largest energy company announced deals encompassing three projects in Alberta, where Asian investors have already been pouring funds into tarry deposits which have opened a new frontier in oil supplies.
Total said it would acquire 19.2 percent of Suncor"s interest in the Fort Hills project, which together with a previous acquisition would give it a 39.2 percent stake in the Suncor-operated venture near Calgary.
Suncor will acquire 36.75 percent of Total"s interest in the Joslyn project where operator Total will retain 38.25 percent.
Total is buying 49 percent of the Suncor-operated Voyageur project near Fort McMurray, where construction stopped in 2008.
"Suncor and Total have agreed to a joint commitment to develop Fort Hills and Voyageur in parallel so that both come on stream early 2016," the companies said in a statement.
Total's payment to Suncor reflects the net value of these deals and a contribution for past costs of the Voyageur project.
Total, the fifth-largest Western oil company by market value, already has significant investments in Canada.
Its shares opened little changed after the announcement.
Alberta's oil sands are seen as the largest potential source of crude outside Saudi Arabia and are the target of billions of dollars of spending by the world's oil industry.
Chinese, South Korean and Thai investors have contributed to the Canadian tar rush with a wave of acquisitions.
However, the environmental impact of the projects is under scrutiny by environmentalists and politicians.
Total said separately it would pay $281.25 million to buy an additional 7.5 pct stake in Australia's Gladstone LNG project from Australian energy firm Santos (STO.AX).
The moves came as Suncor unveiled a 10-year growth strategy including plans to increase oil production.
Posts
