Equinor closes in on $1bn deal to buy Suncor Energy’s North Sea assets

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Wood Group has sustained its robust full-year outlook, having renewed its order book with some "excellent contract wins" over its third quarter of trading.
Wood Group has sustained its robust full-year outlook, having renewed its order book with some "excellent contract wins" over its third quarter of trading.

Norway’s Equinor is close to reaching a deal to buy Suncor Energy’s North Sea oil and gas assets for around $1bn, three sources familiar with the matter told news agency Reuters on Wednesday.

The deal includes Suncor’s 40 per cent stake in the Equinor-operated offshore Rosebank oil and gas project, located some 130 km northwest of Shetland Islands, and one of the largest developments in the ageing basin.

The company and its partners are expected to make a final investment decision on Rosebank’s development later this year.

Equinor, which already owns 40 per cent of Rosebank, had previously estimated the project’s cost at about £4.3bn.

London-listed Ithaca Energy holds the remaining 20 per cent in the Rosebank development.

Equinor and Suncor, Canada’s No. 3 energy company, declined comment.

The sources asked not to be identified as discussions are confidential.

The deal follows the British government’s decision late last year to increase a windfall tax on North Sea oil and gas producers to 35 per cent from 25 per cent, bringing the total tax rate to 75 per cent, one of the highest in the world.

The windfall tax led many companies, including Equinor, to warn that they could reduce their UK North Sea investments.

The acquisition of the Suncor assets gives Equinor a large amount of tax losses that it could use to offset future investments in the basin, the sources said.

Suncor flagged plans to divest its upstream assets in Britain last August as the company aims to focus on its core oil sands operations in northeast Alberta.

The deal also includes a 29.9 per cent stake in the Buzzard oilfield, the largest supplier to Forties, one of North Sea crude oil grades underpinning the Brent crude benchmark, delivering more than 20,000 barrels of oil equivalent (boe) net to Suncor, according to the company’s website.

Last year, Suncor divested its upstream assets in Norway for over $400m to private equity-backed Norwegian oil and gas firm Sval Energy.

Ron Bousso – Reuters