Suncor Energy has reached an agreement to buy TotalEnergies EP Canada in a deal valued at C$1.47bn ($1.1bn).

The French energy major controlled a 31.23% working interest in the Fort Hills oil sands mining project (Fort Hills) through TotalEnergies EP Canada.

With the acquisition, Suncor will own 100% stake in Fort Hills, adding to its 100% ownership of in-situ assets Firebag and MacKay River and giving the corporation access to physically integrated, long-life bitumen supply.

According to Suncor, the deal increases its current oil sands portfolio’s proven and probable reserves by 675 million barrels and net bitumen production capacity by 61,000 barrels per day.

Suncor Energy president and CEO Rich Kruger said: “The transaction secures additional long-term bitumen supply to fill our Base Plant upgraders at a competitive supply cost, addressing a key uncertainty for the company and adding long-term shareholder value.

“With 100% ownership of Fort Hills we will pursue opportunities to create additional value through regional synergies and basinwide management of our unparalleled, integrated oil sands asset base.”

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By GlobalData

Concurrently, TotalEnergies announced that ConocoPhillips has acquired the remaining 50% stake in Surmont project in Canada.

The deal for Surmont project is valued at C$3.7bn following closing adjustments and includes contingent payments of up to C$400m.

As the operator ConocoPhillips now owns 100% stake in the Surmont project.

ConocoPhillips chairman and CEO Ryan Lance said: “This transaction enhances our returns-focused value proposition, improves our return on capital employed, lowers our free cash flow breakeven and is expected to deliver significant free cash flow for decades to come.

“We know this asset very well and plan to further optimize it while remaining on track to achieve our GHG emission intensity reduction goals.”

In April this year, Suncor agreed to purchase TotalEnergies’ Canadian operations, which included the stake in Fort Hills and a 50% working interest in the Surmont in situ asset for C$5.5bn.

However, in May, ConocoPhillips invoked its right of first refusal to buy the French company’s stake in Surmont instead of Suncor, which was forced to restructure the deal.

While ConocoPhillips’ Surmont stake acquisiiton is complete, Suncor’s deal for TotalEnergies’ Canadian operations is expected to close before the end of 2023.

TotalEnergies chief financial officer Jean-Pierre Sbraire said: “The disposal of our Canadian oil sands assets fits our strategy to focus our allocation of capital to oil and gas assets with low breakeven.”