Calgary-headquartered Suncor Energy has revealed a significant change in the offshore oil sector of Newfoundland and Labrador by announcing the divestment of interests in three oilfields. Suncor Energy, based in Calgary, declared a transaction with UK-based Ithaca Energy to sell its 48% stake in Terra Nova, 40% interest in White Rose, and 38.6% interest in West White Rose offshore assets. The deal, valued at $1.2 billion in upfront payment and a potential additional payment of up to $350 million based on future oil prices, is part of Suncor’s strategy to focus on ventures that offer long-term shareholder value. Suncor’s CEO, Rich Kruger, highlighted the company’s commitment to aligning its portfolio with competitive advantages and the strengths of its large-scale, long-life oil sands resources.
Ithaca Energy expressed that the acquisition is in line with its growth plan, marking its first international purchase in Offshore East Coast Canada. Yaniv Friedman, the executive chairman of Ithaca, emphasized the company’s strategy for disciplined international expansion to generate long-term value for shareholders. The deal is set to finalize early next year with an effective date of July 1, subject to regulatory approvals and partner consents.
Minister of Energy and Mines Lloyd Parrott of Newfoundland and Labrador welcomed the development, stating that Suncor’s focus on the oilsands in Western Canada had been anticipated. He expressed excitement about Ithaca’s involvement, emphasizing their experience in challenging environments like the North Sea. Parrott hailed the arrival of Ithaca as a positive signal for the province’s future in the global energy landscape. Ithaca’s interest in prolonging the oilfields’ lifespans and collaborating with other industry players was noted by Parrott, who affirmed that the company has pledged to safeguard local jobs.
OilCo CEO Jim Keating echoed Parrott’s optimism, viewing the transaction as an affirmation of confidence in Newfoundland and Labrador’s offshore resources. Keating highlighted Ithaca’s expertise in late-life field development, drawing parallels between their strategy and the characteristics of Terra Nova and White Rose oilfields. Keating anticipated a growth trajectory for Ithaca in the region and emphasized the potential for innovative approaches and increased risk appetite with new entrants like Ithaca.
Fred Hutton, the Liberal energy critic, acknowledged the common practice of companies divesting stakes but expressed some surprise at the announcement. He underscored the importance of job retention and indicated that the Liberal party would address concerns over potential job impacts with Suncor and in the provincial assembly. Hutton recognized Ithaca as a significant player in the province’s oil industry following the deal, signaling a positive outlook for Newfoundland and Labrador.
The development signifies a notable shift in the offshore oil sector of Newfoundland and Labrador, with the entry of Ithaca Energy reshaping the industry landscape and fostering expectations of growth and innovation in the region.