Cenovus Expands Oilsands while Suncor Exits Newfoundland Assets
Cenovus Energy Inc. is expanding its oilsands operations with a $5.7-billion acquisition of Athabasca Oil Corp., while Suncor Energy Inc. is divesting its offshore assets in Newfoundland to focus on Alberta. The moves come as Alberta’s energy sector sees a more optimistic outlook, bolstered by recent federal and provincial support for the industry.
Suncor announced the sale of its stakes in the Terra Nova, White Rose, and West White Rose offshore developments to U.K.-based Ithaca Energy PLC for $1.2 billion in cash, with an additional contingent payment of up to $350 million based on future oil prices. Suncor CEO Rich Kruger stated that the transaction aligns the company’s portfolio with its long-term value-generating opportunities in the oilsands. The sale is expected to close in early 2027, while Suncor will retain its interests in the Hibernia and Hebron oilfields.
Meanwhile, Cenovus is acquiring Athabasca Oil, which currently produces 40,000 barrels per day of oilsands oil. Cenovus aims to boost this to 115,000 barrels per day by 2032, calling it a significant growth opportunity. CEO Jon McKenzie emphasized that the company sees long-term value in its East Coast assets, particularly with the imminent startup of the West White Rose expansion. He also highlighted recent government measures to enhance the sector’s competitiveness, including tax deductions and upcoming royalty incentives.
Analysts view the acquisitions and divestments as strategic moves, with Desjardins Securities’ Robert Mann noting that Suncor’s deal increases its flexibility to accelerate in situ development projects like Firebag and Lewis. McKenzie echoed this sentiment, stating that the federal and Alberta governments’ steps will draw more capital into the Athabasca Basin and accelerate growth.