BP is selling its 50% interest in a Canadian oil sands project and investing more in offshore production in eastern Canada.
The London-based energy giant invested $4.2 billion in the BP Whiting Refinery in the early 2010s, in what remains the largest private-sector investment in Indiana history, so it could process more heavy crude from the Canadian oil sands instead of sweet crude from Texas.
BP is now selling its 50% non-operated interest in the Sunrise oil sands project, located about 40 miles east of Fort McMurray, Alberta, and which produces about 60,000 barrels per day of bitumen, to Calgary-based Cenovus Energy. The BP Whiting Refinery sometimes sources crude oil from that production site but it is not a main supplier.
The sale was for $466 million in cash and Cenovus’s 35% stake in the undeveloped Bay du Nord project offshore Newfoundland and Labrador.
The company said it already has a sizeable acreage position off Newfoundland and Labrador, where it holds interest in six exploration licenses.
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“This is an important step in our plans to create a more focused, resilient and competitive business in Canada. Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio offshore Newfoundland and Labrador. Along with BP’s active Canadian marketing and trading business, this will position BP Canada for strong future growth,” said Starlee Sykes, BP senior vice president, Gulf of Mexico & Canada.
BP will no longer have any interest in oil sands production in Canada. It will shift focus to offshore growth.
The Bay du Nord property contains as many as an estimated 300 million barrels of oil in the Flemish Pass Basin about 745 miles before the surface of the water. It’s located about 310 miles northeast of St. John’s in Newfoundland and Labrador.
BP aims to drill an initial exploration well called Ephesus in eastern Canada in 2023.
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