Suncor Energy Inc. is to buy an additional 5% of Syncrude Canada Ltd. for $937 million (Can.) from the Canadian subsidiary of Murphy Oil Corp. The purchase will bring Suncor’s interest in Syncrude to 53.74% and close out Murphy’s participation (OGJ Online, Dec. 9, 2015).
Suncor’s share of Syncrude production in the first quarter averaged 112,800 b/d compared with 35,200 b/d a year earlier, primarily due to Suncor’s acquisition of Canadian Oil Sands Ltd., which held 36.74% in Syncrude (OGJ Online, Mar. 22, 2016).
Suncor also reported first-quarter operating losses of $500 million, driven in part by low commodity prices, wider bitumen differentials to Western Canadian Select, and weak benchmark refining margins.
It said record production from Firebag (199,000 b/d) and MacKay River (36,800 b/d) led to record oil sands operations production of 453,000 b/d.
Oil sands production in the second quarter is expected to decrease as a result of an Upgrader 2 turnaround that began at the end of the first quarter.
The transaction with Murphy is subject to closing conditions, including regulatory approval under the Competition Act. It is expected to close by the end of the second quarter and will be effective Apr. 1.
Murphy said Syncrude has been an integral piece of its production and reserve base for more than 22 years. The sale will further focus Murphy’s efforts on “onshore unconventional space in North America.”