Calgary-headquartered Suncor Energy has revealed a significant change in Newfoundland and Labrador’s offshore oil sector by announcing the sale of interests in three oilfields. In a statement released on Sunday, the energy company based in Calgary shared that it had struck a deal with U.K.-based Ithaca Energy to divest its ownership stakes in Terra Nova (48%), White Rose (40%), and West White Rose (38.6%) offshore assets. The agreement entails an initial cash payment of $1.2 billion and a potential additional payment of up to $350 million based on future oil prices, as stated by Suncor.
Suncor CEO Rich Kruger emphasized that the transaction aligns with the company’s strategy to prioritize opportunities that deliver superior long-term value to shareholders. He highlighted the focus on maximizing shareholder value through the company’s competitive advantages and the strengths of its integrated business model, supported by substantial oil sands resources.
According to the announcement, Ithaca will undertake investment commitments and assume all future obligations associated with the assets, including a $500 million regulatory well compliance program starting in 2027 for Terra Nova and estimated abandonment and lease liabilities totaling $1.4 billion. The transaction is effective as of July 1 and is anticipated to finalize early in the upcoming year, subject to closing conditions, regulatory approvals, and partner consents.
While Suncor is retaining its interests in N.L.’s Hebron and Hibernia oilfields, Ithaca expressed that the acquisition is in line with its growth strategy. Ithaca’s executive chairman, Yaniv Friedman, expressed that the deal signifies a new phase of growth for the company as it expands internationally into Offshore East Coast Canada.
Minister of Energy and Mines Lloyd Parrott of Newfoundland and Labrador welcomed the development, noting Suncor’s intention to refocus on its core operations in the oil sands. Parrott praised Ithaca’s experience in the North Sea, highlighting its understanding of the province’s challenging environmental conditions. He expressed optimism about the arrival of a major player like Ithaca, emphasizing the positive signal it sends globally and the potential for a prosperous future for the province.
Parrott indicated that Ithaca’s interest lies in extending the lifespan of the oilfields and collaborating with other industry players rather than acquiring them outright. He reassured that the company is committed to safeguarding local jobs and acknowledged that the expertise of Newfoundland and Labrador’s workforce attracted Ithaca to the region, suggesting that the acquisition could lead to job growth.
CEO of OilCo, Jim Keating, echoed the positive sentiments, viewing the acquisition as a vote of confidence in the province’s offshore sector. He highlighted Ithaca’s expertise in late-life field development, particularly in Terra Nova and White Rose oilfields, and anticipated the company’s growth strategy following its first international investment outside the U.K. Keating emphasized the potential for new ideas and risk appetite that a new entrant like Ithaca could bring to the sector.
The announcement of the deal was met with interest from Liberal energy critic Fred Hutton, who recognized the common occurrence of companies divesting stakes in the industry. Hutton expressed curiosity about the potential job impacts and pledged to address the matter with Suncor and in the provincial legislature. He acknowledged the substantial role of the oil industry in the province and welcomed Ithaca’s emergence as a significant player, signaling a positive outlook for Newfoundland and Labrador’s oil sector.