Total has signed an agreement to sell a 10% interest in the Fort Hills oil sands mining project to the operating partner Suncor Energy. The total aggregate consideration at the time of the announcement is around US$230 million.
Upon closing, expected in 4Q 2015, Total will hold a 29.2% interest in the Fort Hills project, alongside Suncor Energy (50.8%, operator) and Teck Resources (20%). The sale also includes the transfer of a 10% interest in associated logistics in Alberta.
“As a result of a full comparative analysis of its global asset portfolio in the context of lower oil prices, Total has decided to reduce its exposure to Canadian oil sands projects,” said Arnaud Breuillac, president exploration and production. “Following the suspension of the Joslyn project at the beginning of 2015, the sale of this minority interest will reduce our Capex outlay in the Fort Hills project by over [$530 million] from now until end-2017, and help us deliver on our global Capex reduction target.”
Located in Alberta, Canada, some 90km north of Fort McMurray, Fort Hills has a planned capacity of 180,000 b/d. Construction activities are approximately 40% complete. The operator’s target is to start up the project by end-2017.