ConocoPhillips (COP.N) bought TotalEnergies’ (TTEF.PA) Canadian subsidiary’s 50% stake in the Surmont oil complex for $3 billion, displacing Suncor Energy.
Cash-flush producers want to increase production in Alberta’s oil sands, which have the world’s greatest crude reserves.
Suncor (SU.TO) bought TotalEnergies’ Canadian operations last month for C$5.5 billion ($4.11 billion), including Total’s 50% ownership in ConocoPhillips’ Surmont.
The other 50% stakeholder, ConocoPhillips, first refused to buy Surmont. Conoco’s decision hampered Suncor’s efforts to increase long-term bitumen supplies to replace its Base Mine.
Suncor said its Total contract was contingent on ConocoPhillips renouncing its right of first refusal, and it is re-evaluating the transaction.
RBC Capital Markets said investors preferred Surmount’s returns over Conoco’s imminent decision.
Suncor fell 1.3%, while Conoco softened.
ConocoPhillips forecast $600 million in 2024 free cash flow from the purchase.
ConocoPhillips said the acquisition would be funded by cash, short- and medium-term financing, or a combination in the second half 2023.
