ConocoPhillilps just forked over nearly $3 billion in cash to finish its nearly $4 billion purchase of the remaining 50% interest in Surmont, the oil sands operation sold by TotalEnergies EP Canada Ltd.
It means ConocoPhillips now owns 100% of Surmont which had been targeted for purchase by SunCor. But ConocoPhillips, operator of the Fort Hills oil sands project in Canada decided last April that it wanted to exercise its right of first refusal on the remaining stake.
“Long-life, low sustaining capital assets like Surmont play an important role in our deep, durable and diverse low cost of supply portfolio,” said Ryan Lance, chairman and chief executive officer.
“We know this asset very well and plan to further optimize it while remaining on track to achieve our GHG emission intensity reduction goals.”
The transaction is subject to contingent payments for a five-year term of up to approximately $0.3 billion (CAD$0.4 billion) representing $2 million (CAD$2.7 million) for every dollar that WCS pricing exceeds $52 per barrel during the month, subject to certain production targets being achieved.
ConocoPhillips remains on track to achieve its previously announced accelerated GHG intensity reduction target of 50-60% by 2030, using a 2016 baseline. Since 2016, Surmont’s GHG emissions intensity has declined by about 20%, and ConocoPhillips has plans for future operational emissions reduction by applying both current and new technology.
Source: press release