Suncor (TSX:SU), Canada’s largest energy company, boosted its stake in the Fort Hills oil sands project, located Alberta’s Athabasca region, after paying $310 million to partner Total E&P Canada for an additional 10% interest in the venture.
Total E&P Canada, a subsidiary of French firm Total SA, which will retain a 29.2% interest, remaining the second-largest of the three companies involved in the operation.
The third-party, Canada’s Teck Resources (TSX:TCK), keeps a 20% interest in the operation, located 90 km north of Fort McMurray.
Suncor said the transaction — which can be undertaken within its current capital spending plan for 2015 — underscores its confidence in its position within the oil sands industry.
“With engineering over 90 per cent complete and construction surpassing 40 per cent, Fort Hills is on track, with first oil expected in the fourth quarter of 2017,” Suncor president and CEO Steve Williams, said in a statement.
Fort Hills, a joint venture originally struck between Petro-Canada, Teck and UTS Energy Corp., was once shelved because of the financial crisis that began in 2008. Suncor revived it after merging with Petro-Canada and the company and its partners have been working on it ever since.
The operation is expected to boost output in northern Alberta by 180,000 barrels a day.