Equinor Nears $1 Billion Deal to Buy Suncor's UK Oilfields

By Ron Bousso
Wednesday, March 1, 2023

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 Wednesday.

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 ageing 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 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% 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 $400 million to private equity-backed Norwegian oil and gas firm Sval Energy.

($1 = 0.8245 pounds)

(Reuters - Additional reporting by Nerijus Adomaitis and Nia Williams; writing by Nerijus Adomaitis, Ron Bousso and Barbara Lewis)

Categories: Mergers & Acquisitions Industry News Europe Production

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