ConocoPhillips to exercise pre-emptive right; will buy rest of Surmont project

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CALGARY — ConocoPhillips says it will exercise its right of first refusal and purchase TotalEnergies’ 50 per cent stake in the Surmont oilsands project for $4 billion.

The Houston-based oil company is currently the operator and the 50 per cent owner of the in situ oilsands asset near Fort McMurray, Alta.

In April, Suncor Energy Inc. said it would acquire the other half of Surmont, part of a larger $6.1-billion deal that would also see Suncor acquire French company Total’s stake in the Fort Hills oilsands project.

But ConocoPhillips says it will pre-empt Suncor and purchase the remainder of Surmont for itself. 

The company says it expects the deal will add approximately US$600 million of annual free cash flow in 2024, based on a West Texas Intermediate oil price of US$60.

The deal is expected to close in the second half of 2023, with an effective date of April 1, 2023.

This report by The Canadian Press was first published May 26, 2023.

Companies in this story: (TSX:SU)

The Canadian Press

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