Suncor sells most of its Canadian conventional energy assets
Centrica, Qatar Petroleum to buy natural gas crude oil in three provinces.
CALGARY — Centrica PLC of Britain and Qatar Petroleum International will pay about $1 billion cash to acquire a majority of Suncor Energy’s conventional natural gas and crude oil assets in three western provinces.
Suncor says the deal excludes the majority of its unconventional natural gas properties in the Montney region of BC and its Wilson Creek unconventional oil assets in Alberta.
“Today’s announcement is further proof of our commitment to capital discipline and aligning assets with strategic objectives,” said Steve Williams, Suncor’s president and chief executive officer.
“We will continuously review and refine our portfolio of assets to ensure we are investing in projects that deliver profitable growth and strong returns for our shareholders.”
The proposed deal, which includes Suncor properties in Alberta, northeast BC and southern Saskatchewan, is subject to regulatory approval and is expected to close in the third quarter of 2013.
Centrica, which owns the Direct Energy business that operates in all 10 Canadian provinces and most of the US, will hold a 60% share of the partnership and operate the business.
Besides selling natural gas and electricity to homes, Direct Energy provides residential and business services, provides gas storage and transportation and produces energy through its upstream operations.
“In today’s competitive energy environment this acquisition represents an ideal strategic fit for Centrica’s existing upstream portfolio and skill sets,” said Wes Morningstar, a Centrica senior vice-president with Centrica in Calgary.
“Growing our upstream gas operations is an important step to ensuring the company is a solid long-term partner to millions of residential and business customers across North America.”
Nasser Al-Jaidah, chief executive officer of Qatar Petroleum International, said “this investment in the Western Canadian Sedimentary Basin is a significant step in the development of QPI’s global upstream business.”
It’s the first deal under a memorandum of understanding signed between the two parties in December 2011.
Suncor says the business includes proven and probable reserves estimated at 978 billion cubic feet equivalent of gas and will produce about 250 million cubic feet per day this year.
© 2013 The Canadian Press