By Andy Sambidge
Qatar Petroleum International and the UK's Centrica buy Canadian assets of Suncor Energy
Qatar Petroleum International and the UK's Centrica on Monday said they have agreed to buy gas and oil assets from Suncor Energy for C$1bn ($979m) in cash.
The acquisition is the first investment under the Memorandum of Understanding signed between the international arm and wholly owned subsidiary of Qatar Petroleum (QP) and Centrica in December 2011.
The assets will be held in a newly established partnership between Centrica (60 percent share) and QPI (40 percent share), which will be operated by Centrica, a statement said.
The assets include proven and probable reserves estimated by the partners at 978 billion cubic feet equivalent (bcfe), with estimated 2013 production of approximately 250 million cubic feet equivalent per day (mmcfe/d), equal to 15 million barrels of oil equivalent (mmboe) per annum.
The assets are located principally in South and Central Alberta where they overlap with existing Centrica assets, providing the opportunity for cost savings in production and development, and in North East British Columbia, the statement said.
The package also includes over 1 million acres of undeveloped land and the companies said there is significant potential for reserves and production upside through the use of horizontal drilling and multi-stage fracturing.
Nasser Al-Jaidah, CEO of QPI, said: “We are pleased to be advancing our important ongoing relationship with Centrica under the MoU through this joint acquisition.
"This investment in the Western Canadian Sedimentary Basin is a significant step in the development of QPI’s global upstream business. We look forward to continuing to advance QP’s overall North American energy business through the MoU and other initiatives.”
Sam Laidlaw, chief executive of Centrica, added: “I am delighted to achieve our first investment with QPI under the MoU, and the establishment of a new partnership in North America.
"The acquisition provides attractive returns in a region we know well, and significantly increases the size and quality of our portfolio.
“Today’s announcement marks another step in delivering the strategy we announced in February and strengthens the relationship between Centrica and QPI. We look forward to working together to further expand the scale and scope of our joint North American operations.”
Nice, old energy money is now investing in the new energy future. Love your money but please stay home : ).
Good investment, we can now exploit the resources in NA, we also have Russia, and a large percentage in Royal Dutch Shell and Total. @procan, Hell yeah we're staying in our little paradise, just keep sending the dividends.
doesn't this break the law? after the whole nexen thing the govt maintained the $300mil cap on soc investments in canada.
How is Canadian oil won as sediment from sand wells (which is more sand and gravel than oil), "the new energy future"? Also, I bet you love Qatari money, but Qataris are just there to make some smart money for a decade or two. The catastrophic environmental damage will be all yours to keep, don't spend that money all in one place, might come in handy to one day restore the damage on native people's former hunting grounds. Which by the way is funny, that Canadians can sell what they don't own and give none of that money to those rightfully entitled to it...
Qatar's international investment strategy seems to be much more successful than what Dubai tried a few years ago. Granted, they too are overpaying for choice assets, but at least they are managing to diversify. Dubai overpaid and still ended up with nothing. Perhaps there are a few lessons that can be learned?
@Hisham, right on the spot.
It would jonjon if Qatar investment had any say in the operations of the of the Corp. In this case they are, as they say a silent partner and should be more than happy collecting dividends. As I understand Qatar has a 40% share.