PARIS, FRANCE: ConocoPhillips has agreed to buy TotalEnergies’ 50% stake in the Surmont oil sands project in Canada for $3 billion in cash, plus up to $325 million in additional payments under certain conditions.

The deal was announced on May 26, 2023, after ConocoPhillips exercised its preemption right to purchase the interest held by TotalEnergies EP Canada Ltd, a subsidiary of TotalEnergies.

The Surmont project, located in Alberta, is a steam-assisted gravity drainage (SAGD) operation that produces about 140,000 barrels per day of bitumen. ConocoPhillips is the operator and currently owns the other 50% stake. The transaction is expected to close in the third quarter of 2023, subject to regulatory approval.

The deal is part of TotalEnergies’ plan to sell its Canadian oil sands assets and reduce its exposure to carbon-intensive projects. TotalEnergies had previously announced on April 27, 2023, that it had agreed to sell the entirety of the shares of TotalEnergies EP Canada Ltd to Suncor Energy Inc. for C$7.07 billion (about US$5.2 billion). However, that transaction was subject to the waiver of ConocoPhillips’ preemption right.

TotalEnergies said it will still be open to complete a transaction with Suncor regarding the sale of its 24.58% working interest in the Fort Hills oil sands project, which is also part of TotalEnergies EP Canada Ltd’s portfolio. The value of that deal was agreed in the initial sale and purchase agreement with Suncor.

TotalEnergies is a global energy company that produces and markets fuels, natural gas and electricity. The company aims to become a broad energy company and reach net-zero emissions by 2050.

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