Canada’s Suncor Energy (SU.TO) is continuing talks with French oil major TotalEnergies (TTEF.PA) about buying its nearly one-third stake in the Fort Hills oil sands mine, Suncor’s CEO said on Tuesday.
Chief Executive Rich Kruger said he expects a resolution of the talks this year. Canada’s second-largest oil producer is looking to increase its bitumen supplies to replace its aging Base Mine.
“We generally would prefer to operate and have 100% ownership of our assets; that's generally where we think we can add the most value and be the most competitive,” Kruger said on a quarterly conference call. "Fort Hills would fit into that."
Total owns a 31.23% stake in Alberta's Fort Hills, with the operator Suncor owning the rest.
Suncor agreed in April to buy Total’s Canadian operations for C$5.5 billion ($4.08 billion), including Total’s Fort Hills interest and its 50% stake in the Surmont facility. However, ConocoPhillips (COP.N), which operates Surmont, exercised its right of first refusal to buy Total’s stake instead of Suncor, triggering a review of Suncor’s deal with Total.
Kruger said Suncor also has internal options to increase its long-term bitumen supply.
Suncor shares dipped 0.6% in Toronto, registering a smaller loss than its Canadian peers. On Monday, Suncor reported a sharp drop in quarterly profit as oil and gas prices retreated from last year’s peak.
Kruger, a former Imperial Oil (IMO.TO) CEO, took the helm of Suncor in April and promised to improve the company’s poor record on worker safety and operational reliability.