BP sells oilsands stake to Cenovus, snaps up stake in Canadian offshore project

Source: Cenovus

(Bloomberg) — BP Plc sold out of Canada’s oilsands, divesting its stake in the Sunrise project to Cenovus Energy Inc. while acquiring offshore exploration from the same company.

The oilsands disposal aligns with BP’s plans to divest projects with higher GHG emissions as investors demand greater efforts to tackle climate change.

Cenovus agreed to buy BP’s 50 per cent interest in Sunrise for C$600 million ($467 million) in cash and a contingent payment of as much as C$600 million which expires after two years. The Calgary-based company will also hand over its 35 per cent interest in the Bay du Nord oil project off Newfoundland and Labrador.

“This is an important step in our plans to create a more focused, resilient and competitive business in Canada,” BP senior vice-president for the Gulf of Mexico and Canada, Starlee Sykes. said in a statement. “Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio.”

The offshore oil project, operated by Equinor ASA, won governmental approval earlier this year despite environmental opposition. The $12 billion development is estimated to have recoverable reserves of around 300 million bbls of oil.

BP plans to reduce its total oil and gas production 40 per cent by 2030 and says it will focus on “resilient hydrocarbons” — those which have a lower cost and carbon footprint. The London-based major has also said it will no longer explore for fossil fuels in new countries.

© 2022 Bloomberg L.P.

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