BP is selling its latest interest in Canadian oil sands to Canadian company Cenovus Energy as part of a portfolio restructuring that will allow it to purchase an offshore oil project in Eastern Canada.
BP has agreed to sell its 50 per cent stake in the Sunrise oil sands project in Alberta to Cenovus Energy, the British supermaire said in a statement Monday.
Canada’s exit from oil sands in Canada follows other sales of one of the most carbon-intensive oil production, such as those made by Shell and Equinor in recent years as international oil companies look to reduce their emissions under high pressure from investors and activists.
As part of its net zero plan, BP said oil and gas production would fall by 40% by 2030 through active portfolio management.
Following the release of oil sands, BP is not abandoning the Canadian oil sector and shifting its focus to future potential growth in offshore areas. As part of the deal with Cenovus, the British company will buy the Canadian company’s 35 percent stake in the undeveloped Bay du Nord project in the offshore areas of Newfoundland and Labrador. The deal includes 467 million (C $ 600 million) in cash, a conditional payment with a maximum total value of C $ 600 million expiring in two years, and Cenovus’ 35 percent stake in Bay du Nord.
The Bay du Nord project is led by Norwegian Equinor and received a positive environmental assessment from the Government of Canada in April this year. The project has not yet made a final investment decision, with the first oil expected to be produced in the late 2020s.
“This is an important step in our plans to create a more focused, sustainable and competitive business in Canada. Bay du Nord will add significant space and open resources to our existing portfolio in the Newfoundland and Labrador area, “said Starley Sykes, Senior Vice President, BP, Gulf of Mexico and Canada.
BP is currently interested in six exploration licenses in the offshore region of East Newfoundland.
By Tsvetana Paraskova for Oilprice.com
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