Suncor and Teck increase shares in Fort HillsTotal SA reduces stake in Fort Hills oil sands mine, ends commercial dispute with Suncor
Total SA reduces stake in Fort Hills oil sands mine, ends commercial dispute with Suncor
By Kelsey Rolfe
January 04, 2018
The Fort Hills central substation. After a "commercial dispute" with partner Total SA over project funding, Suncor and Teck increased their stakes in the oil sands mine. Courtesy of Suncor Energy
Suncor Energy and Teck Resources increased their stakes in the Fort Hills oil sands mine to resolve a dispute with the project’s third partner, French oil and gas company Total SA.
The agreement involves Suncor and Teck taking increased shares in the mine from Total’s share, Suncor reported on Wednesday in a news release.
Suncor now holds a 53.06 per cent interest, up from 50.8 per cent, and Teck 20.89 per cent, up from 20 per cent. Total’s share decreased to 26.05 per cent, from 29.2 per cent.
“We’re pleased to have reached this agreement and taken a bigger stake in what is arguably the best long-term growth project in our industry,” Suncor president and CEO Steve Williams said in a statement.
In early 2017 Suncor increased the Fort Hills capital cost estimates to between $16.5 billion and $17 billion, up from $15.1 billion previously. In July, it said it would move up project spending that was previously earmarked for 2018.
On a second-quarter earnings call in July, Williams told analysts the company was in a dispute with Total over spending on Fort Hills. “Total has chosen not to approve or provide additional project sanction funding and as a result we are now in the early stages of a commercial dispute,” he said.
Fort Hills is expected to begin production in mid-January, Suncor said on Wednesday. Previously the company had been aiming for first oil by the end of 2017. The mine is expected to produce 194,000 barrels per day, and have a life of 50 years.
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