Calgary-based Suncor Energy has made a significant move in Newfoundland and Labrador’s offshore oil sector by announcing the sale of its ownership interests in three oilfields. The company disclosed on Sunday that it has agreed to divest its 48% stake in Terra Nova, 40% stake in White Rose, and 38.6% stake in West White Rose to U.K.-based Ithaca Energy.
The deal involves an initial cash payment of $1.2 billion along with a potential additional payment of up to $350 million based on future oil prices. Suncor’s CEO, Rich Kruger, highlighted that this transaction is part of the company’s strategy to focus on ventures that offer the highest long-term value for shareholders. He emphasized aligning their portfolio with their core strengths and the vast oil sands resources they possess.
Ithaca Energy, in response, expressed enthusiasm about the acquisition, citing its alignment with their growth plans. The company’s executive chairman, Yaniv Friedman, stated that this marks a new phase of expansion for Ithaca as they venture into offshore East Coast Canada, marking their first international investment outside the U.K.
The Newfoundland and Labrador Energy and Mines Minister, Lloyd Parrott, welcomed the development, noting Suncor’s shift back to the oilsands. He expressed optimism about Ithaca’s arrival, highlighting their expertise in the challenging environments akin to the province’s offshore fields. Parrott stressed the positive signal sent globally by this partnership, indicating a promising future ahead.
Ithaca’s interest in extending the lifespan of the oilfields and collaborating with other industry players was underscored by Parrott, who assured that local jobs would be safeguarded and potentially expanded. Similarly, OilCo CEO Jim Keating viewed the deal as a vote of confidence in the province’s offshore sector, anticipating growth strategies from Ithaca.
Keating emphasized the potential for new ideas and risk appetite that a fresh entrant like Ithaca could bring to the basin, hinting at their possible involvement in Equinor’s proposed Bay du Nord project. The announcement was seen as a positive development for Newfoundland and Labrador’s oil industry, with Keating noting the growing reinvestment in legacy projects worldwide.
Liberal energy critic Fred Hutton acknowledged the common practice of companies divesting stakes but expressed surprise at the move. He highlighted concerns about job impacts and pledged to address these issues with Suncor. Hutton recognized Ithaca’s significant presence in the province’s oil industry and the positive implications of a new major player entering the field.