Suncor to Acquire Teck Resources’ Fort Hills Oilsands Stake for $1B

Suncor Energy Inc. said late Wednesday that it had agreed to pay Teck Resources Limited $1 billion to buy Teck’s share of the Fort Hills project in northern Alberta.

As of November 1st, with the completion of the all-cash purchase, Suncor will own more than 75% of the oilsands project. The remaining 24.60% is currently held by French energy giant TotalEnergies SE, which has signalled its intentions to exit from the controversial oilsands mining project.

Suncor’s interim president and CEO, Kris Smith, said in a statement: “The acquisition of an additional interest in Fort Hills meets our return objectives, builds upon our strategy to optimize our portfolio around our core operated assets, and underscores Suncor’s confidence in the long-term value of the Fort Hills Project.”

The largest Canadian mining corporation, Teck Resources, now will be able to focus on expanding its copper and low-carbon metals projects.

In recent years, the open-pit truck and shovel mine located north of Fort McMurray, known as Fort Hills, has struggled with operational difficulties such as missed production targets, safety problems, and rising costs.

The Fort Hills operation had to stop production in 2021 due to slope stabilization work at the mine. Back in 2029, the project also went through a setback when the provincial government implemented crude production limits to fight significant pricing differentials between U.S. and Canadian oil.

Suncor stated in a release that it has started a multi-year improvement initiative to optimize production at Fort Hills. Suncor predicts a 5% lower gross output and higher operational costs per barrel over the next three years as it implements long-term upgrades.

“While the Fort Hills mine has faced challenges in the early years of the mine life, including challenges due to government-directed production shut-ins, I have full confidence in our current mine plan assembled with fresh external mining perspectives,” said Smith.

Original source material for this article taken from here