Total SA, Europe’s third-biggest oil producer, bought stakes in oil sands developments in Alberta from Suncor Energy Inc. for C$1.75 billion ($1.74 billion).
Under the deal, Total will acquire a 19.2 percent stake in Suncor’s Fort Hills project and will also buy a 49 percent stake in the Suncor-operated Voyageur upgrader development near Fort McMurray. In return, Suncor will take 36.75 percent of the French company’s interest in Joslyn, according to a statement.
The two companies agreed to develop Fort Hills and Voyageur “in parallel” so that they come on stream in early 2016, Total said. Production from the Joslyn North mine of 100,000 barrels a day will start in 2017 or 2018.
Plans to start extracting oil at Alberta’s Joslyn Creek, where oil-soaked rocks and dirt will be mined near the surface, have sparked scrutiny from regulators and the ire of environmental groups such as Greenpeace. Regulators have yet to approve the agreement, Total said.
Total had planned to produce as much as 250,000 barrels a day from its Canadian oil sands projects by 2020, buoyed by the purchase of UTS Energy Corp.
The purchase of Calgary-based UTS, which was announced in July, will give Total a 20 percent stake in the Fort Hills mining project, also in the Athabasca region of Alberta. The open-pit mine contains about 3.4 billion barrels of bitumen and is estimated to produce about 160,000 barrels a day by 2016. The project is 60 percent-owned by Suncor, and the remaining 20 percent is held by Teck Resources Inc.
Alberta’s oil sands contain the biggest crude reserves outside of Saudi Arabia, according to Canadian government estimates.