Is SU playing a waiting game with Teck on Fort HillsTeck Resources owns 21.3% of the Fort Hills Limited Partnership.
Following Teck's announcement in February 2020 to cancel its plans to spend $20 billion on an oil sands project, two of Teck's environmental activist shareholders (Tribeca and Impala) went public in May 2020 expressing their interest in pressuring Teck to sell off oil and coal assets.
Teck announced its intention to sell off its metallurgical coal division for $8 billion last month.
The pandemic guaranteed that 2020 was a bad year. for oil. When things started looking up for oil in 2021 and suddenly Teck announces in August that there are big problems at Fort Hills. Suncor on the other hand pretty much tried to sweep the news under the table by saying Fort Hills would require some remediation in the second half of 2021 but the work wouldn't materially affect SU's 2021 cash flow.
XOM is moving ahead on its Guyana reserves. ENB just spent $4 billion on buying the Ingleside port at Corpus Christi. Would it be that much of a stretch to see SU use some of its massive cash flow to buy out Teck's 22,000 bpd portion of Fort Hills? After all, Fort Hills has 50 years of reserves and is already a lower GHG producer with its new carbon recovery system.
I have to wonder if SU, the operator of Fort Hills, is playing a waiting game with Teck on its Fort Hills ownership. I don't think there are going to be a lot of buyers of oil sand projects these days. It wouldn't surprise me to see an announcement about SU buying Teck's interest in Fort Hills at some point. Who knows, maybe tomorrow.