Total to buy Fort Hills stake from UTS

By OGJ editors
HOUSTON, July 7 – Total E&P Canada Inc. has agreed to acquire a 20% interest in the Fort Hills oil sands mining project in the Athabasca region of Alberta from UTS Energy Corp.

Total will pay $1.15 billion (Can.) to acquire UTS after UTS transfers assets other than the Fort Hills interest to a new entity. The deal is subject to approval by regulators and two thirds of UTS’s shareholders. The UTS board has recommended the agreement.

Operated by Suncor Energy Inc., the Fort Hills project involves development of a resource estimated at 3.4 billion bbl of bitumen in two phases. The project is about 90 km north of Fort McMurray.

First-phase production of 160,000 b/d is expected to start in 2015-16, Total said.

Suncor holds a 60% interest in Fort Hills. Teck Resources Ltd. holds 20%.

Total said it is considering divestment of some of its 75% interest in the Joslyn mining project but wants to remain operator with an interest of about 50%. It plans to develop Joslyn in two phases producing 100,000 b/d each.

The Joslyn mine is southwest of and close to Fort Hills.