Calgary-headquartered Suncor Energy has revealed changes in Newfoundland and Labrador’s offshore oil sector by announcing the sale of its stakes in three oilfields. In a statement issued on Sunday, the energy company from Calgary disclosed a deal with U.K.-based Ithaca Energy to offload its 48% interest in Terra Nova, 40% interest in White Rose, and 38.6% interest in West White Rose offshore assets. The transaction involves an upfront cash payment of $1.2 billion along with a contingent payment of up to $350 million based on future oil prices, as confirmed by the company.
Suncor’s CEO Rich Kruger stated in the announcement that the move aims to enhance long-term shareholder value by focusing on opportunities that align with the company’s core strengths and competitive advantages. The statement highlighted Suncor’s commitment to its physically-integrated business supported by significant oil sands resources with extended life spans.
According to the statement, Ithaca will take over investment commitments and all future liabilities linked to the assets, including a $500 million regulatory well compliance program for Terra Nova starting in 2027 and the total estimated abandonment and lease liabilities of $1.4 billion. The transaction is set to be effective from July 1 and is anticipated to be completed early in the upcoming year, subject to meeting closing conditions, regulatory approvals, and partner consents.
Suncor mentioned that it will retain its interest in Newfoundland and Labrador’s oilfields Hebron and Hibernia, indicating a strategic decision to focus on specific assets within the region. In a separate statement, Ithaca expressed enthusiasm for the acquisition, emphasizing its growth strategy and the potential for value creation in offshore East Coast Canada.
Energy Minister Lloyd Parrott was not accessible for an interview early Monday morning, while Liberal energy critic Fred Hutton acknowledged the common practice of companies divesting stakes but expressed surprise at the news. Hutton emphasized concerns about potential job impacts and pledged to address the matter with Suncor and in the House of Assembly during the fall session. He noted the significance of the oil industry in the province and viewed Ithaca’s involvement as a positive indicator of interest from new players in the sector.