Suncor Energy, a Calgary-based company, has unveiled a significant change in Newfoundland and Labrador’s offshore oil sector by divesting its interests in three oilfields. The company confirmed on Sunday that it has struck a deal with Ithaca Energy, based in the UK, to sell its ownership stakes of 48% in Terra Nova, 40% in White Rose, and 38.6% in West White Rose offshore assets.
The agreement entails an initial cash payment of $1.2 billion along with a potential additional payment of up to $350 million tied to future oil prices. Suncor’s CEO, Rich Kruger, stated that the move is aimed at maximizing long-term shareholder value by concentrating on strategic opportunities that leverage the company’s strengths in large-scale, long-lasting oil sands resources.
Under the terms of the deal, Ithaca will take on all investment commitments and future liabilities associated with the assets, including a $500 million well compliance program for Terra Nova starting in 2027 and estimated abandonment and lease liabilities amounting to $1.4 billion. The transaction is set to be finalized early in the new year, subject to regulatory approvals, closing conditions, and partner consents.
While Suncor retains its stakes in the Hebron and Hibernia oilfields in Newfoundland and Labrador, Ithaca views the acquisition as aligned with its growth strategy. The company’s executive chairman, Yaniv Friedman, emphasized that this move signifies a new phase of expansion for Ithaca Energy as it embarks on its first international acquisition in Offshore East Coast Canada.
In response to the development, Newfoundland and Labrador’s Energy and Mines Minister, Lloyd Parrott, expressed enthusiasm, noting that Suncor’s shift back to its primary focus on the oilsands in the west had been anticipated. He highlighted Ithaca’s experience in the challenging conditions of the North Sea and its potential to contribute positively to the province’s oil and gas sector.
Parrott reassured that the acquisition is likely to extend the life of the oilfields and foster collaboration with other industry players, safeguarding local jobs. He emphasized that the entry of Ithaca signals a promising future for the province and underscores its attractiveness as a global investment destination.
Meanwhile, OilCo CEO Jim Keating welcomed the announcement as a vote of confidence in Newfoundland and Labrador’s offshore resources. He underscored Ithaca’s expertise in late-life field development and expressed optimism about the company’s growth strategy and potential contributions to the region’s energy sector.
Keating emphasized the importance of new players like Ithaca in bringing fresh perspectives and innovation to the industry, particularly as legacy projects gain renewed interest worldwide. He also hinted at Ithaca’s potential interest in Equinor’s Bay du Nord project, which is expected to reach a final decision in early 2027.
The move by Suncor and Ithaca, though not uncommon in the sector, has sparked interest and questions from stakeholders. Liberal energy critic Fred Hutton highlighted the significance of the oil industry and its impact on jobs, signaling that discussions on the matter will be raised by the political leadership.
As Ithaca emerges as a major player in the province’s oil industry, the deal signifies a notable shift in the offshore oil landscape, with potential implications for Newfoundland and Labrador’s economic future.