Suncor Energy has agreed to purchase TotalEnergies EP Canada Ltd., which holds a 31.23% working interest in the Fort Hills oil sands mining project for C$1.468 billion ($1.069 billion). The acquisition will add 61,000 barrels per day of net bitumen production capacity and 675 million barrels of proven and probable reserves to Suncor’s existing oil sands portfolio. Regulatory approvals have been received and, subject to closing, the transaction will have an effective date of April 1, 2023.

“The transaction secures additional long-term bitumen supply to fill our Base Plant upgraders at a competitive supply cost, addressing a key uncertainty for the company and adding long-term shareholder value,” said Rich Kruger, president and CEO, Suncor Energy. “With 100% ownership of Fort Hills we will pursue opportunities to create additional value through regional synergies and basin-wide management of our unparalleled, integrated oil sands asset base.”

Upon closing, Suncor will have full ownership of Fort Hills and it, along with its Firebag and MacKay River in-situ assets, will provide the company with bitumen to maximize the use of its Base Plant upgraders after the Base mine exhausts its reserves.

Earlier this year, Suncor made a $C5.5 billion ($4 billion) bid for TotalEnergies’ Canadian operations, which included the Fort Hills interest and a 50% stake in the Surmont thermal oil sands facility. The transaction, however, fell apart when ConocoPhillips, which operates Surmont, exercised its first right of refusal to buy TotalEnergies’ stake in Surmont.