SUNCOR TO SELL STAKES IN TERRA NOVA, WHITE ROSE AND WEST WHITE ROSE

(Oct 4th)

Suncor Energy has announced a major deal that will see the company sell its interests in three offshore Newfoundland and Labrador oil developments to Ithaca Energy.

The deal includes Suncor’s 48% interest in Terra Nova, 40% interest in White Rose and 38.6% interest in West White Rose. Ithaca will pay Suncor $1.2 billion in cash, with up to another $350 million possible depending on future oil prices.

Those percentages represent Suncor’s ownership, or “working interest,” in the overall offshore developments. In simple terms, Suncor owns a percentage of each project and shares in its production, costs and future obligations.

Suncor is a Calgary-based Canadian energy company involved in oil sands, offshore oil production, refining and fuel sales, including the Petro-Canada network. The company has been involved in Newfoundland and Labrador’s offshore industry for more than 20 years and currently operates Terra Nova.

Ithaca Energy may be a less familiar name in Newfoundland and Labrador. The company is based in the United Kingdom and is one of the largest independent oil and gas operators in the UK North Sea. This deal represents Ithaca’s entry into Canada’s East Coast offshore industry, bringing its existing experience operating offshore oil and gas projects to Newfoundland and Labrador.

Terra Nova is currently operated by Suncor. As part of the sale, Ithaca plans to take over responsibility for operating the project.

Ithaca will also take over Suncor’s future financial commitments and liabilities connected with the assets. That includes a $500-million regulatory well compliance program at Terra Nova beginning in 2027, as well as an estimated $1.4 billion in abandonment and lease liabilities associated with the assets.

White Rose is operated by Cenovus, while West White Rose is an extension of the White Rose field. Suncor is a partner in those developments rather than their operator.

The sale does not mean Suncor is completely leaving Newfoundland and Labrador’s offshore industry. The company will retain its interests in Hibernia and Hebron.

The deal is expected to close in early 2027, but still requires regulatory approvals, approval from the other project partners and other closing conditions.

There has also been discussion about what the sale could mean for offshore workers. Suncor’s announcement does not state that layoffs are planned as part of the deal.

Suncor CEO Rich Kruger said the transaction will allow the company to focus more of its efforts on opportunities it believes will provide the greatest long-term value.