Norway's Equinor is close to reaching a deal to buy Suncor Energy's British North Sea oil and gas assets for around $1 billion, three sources familiar with the matter told Reuters on March 1.
The deal includes Suncor's 40% stake in the Equinor-operated offshore Rosebank oil and gas project, located some 130 km (80 miles) northwest of Shetland Islands, and one of the largest developments in the aging basin.
Equinor and its partners are expected to make a final investment decision on Rosebank's development later this year.
Equinor, which already owns 40% of Rosebank, had previously estimated the project's cost at about 4.3 billion pounds ($5.22 billion). London-listed Ithaca Energy holds the remaining 20% 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% from 25%, bringing the total tax rate to 75%, one of the highest in the world.
The windfall tax led many companies, including Equinor, to warn that they could reduce their U.K. 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% 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 boe net to Suncor, according to the company's website.
Last year, Suncor divested its upstream assets in Norway for over $400 million to private equity-backed Norwegian oil and gas firm Sval Energy.
Recommended Reading
W&T Offshore Announces CFO Change
2023-04-06 - W&T’s CFO Janet Yang is leaving the company on May 11 and Vice President and Chief Accounting Officer Trey Hartman will be serving as interim CFO until a formal replacement is made.
AltaGas Names CEO, Enbridge Announce Promotion
2023-05-08 - Enbridge promoted Patrick Murray to CFO at Enbridge, while Enbridge’s Vern Yu will depart to become president and CEO of AltaGas.
Valero’s CEO Gorder to Retire, COO Riggs to Succeed Him
2023-05-10 - Valero Energy Corp.’s Gorder is retiring as CEO and also has been elected as the executive chairman of the board.
Amplify Energy Names James Frew as CFO
2023-04-17 - James Frew joins Amplify Energy was named senior vice president and CFO by Amplify Energy on April 17.
Range Resources CEO Jeff Ventura to Retire from Marcellus Shale Pioneer
2023-03-17 - Ventura exits Range Resources weeks after reports that the Marcellus E&P might be purchased by Pioneer Natural Resources, which the Permian company denied.