Suncor and Petro-Canada have agreed to merge the two companies. Upon completion of the transaction, the parties have agreed the combined entity will operate corporately and trade under the Suncor name, while maintaining the strong brand presence and customer loyalty of Petro-Canada in refined products. According to Reuters, Suncor will acquire Petro-Canada for C$18.43 billion ($14.9 billion) in an all-share deal.
"This merger creates a made-in-Canada energy leader with the assets, cost structure and financial strength to compete globally," said Rick George, who is president and chief executive officer of Suncor and who will assume the same role with the merged entity. "The combined portfolio boasts the largest oil sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets, and low-cost production from Canada's east coast and internationally."
The merging companies estimate achieving annual operating expenditure reductions of $300 million. These savings are expected to come from efficiencies in overlapping operations, streamlining business practices, and improved logistics. The companies also expect to achieve annual capital efficiencies of approximately $1 billion through elimination of redundant spending and targeting capital budgets to high-return, near term projects.
The merged company's Board of Directors is expected to comprise 12 Directors, including eight members from Suncor's current board and four members from Petro-Canada's current board. John Ferguson, Suncor Energy Chairman, will serve as Chairman of the Board of Directors of the merged company.
Petro-Canada has been active in CBM and tight gas exploration in the Rockies. They have projects in the Powder River, Uinta and Denver Julesburg Basins. In 2008 the company drilled 287 gross wells in the Rockies. Their exploration strategy is to explore CBM and tight gas in the Rockies and shale gas in British Columbia. Suncor has a large refinery in Commerce City Colorado.
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