TotalEnergies to acquire additional Fort Hills interests ahead of planned spin-off

TotalEnergies EP Canada Ltd., a TotalEnergies affiliate, has exercised its preemption right to acquire an additional 6.65% interest in the Fort Hills Energy LP and associated sales and logistics agreements from Teck Resources Ltd., Vancouver, for $312 million (Ca.).

TotalEnergies is exercising its right following an October 2022 deal struck between Teck Resources and Suncor Energy Inc. for Teck’s entire 21.3% interest share in the Fort Hills partnership for $1 billion (Can.). TotalEnergies challenged the deal.

In December 2022, TotalEnergies filed an application in the Court of King’s Bench of Alberta related to the validity of the right of first refusal notice delivered to it by Teck Resources in connection with the sale of Teck’s interest in Fort Hills to Suncor.

TotalEnergies expects to spin off TotalEnergies EP Canada this year as it exits the Canadian oil sands market (OGJ Online, Sept. 9, 2022). The spin-off is planned to be submitted to vote at TotalEnergies’ annual shareholders’ meeting in May. The deal to acquire additional Fort Hills interests will deliver value to the entity, said Jean-Pierre Sbraire, chief financial officer of TotalEnergies, in a release Jan. 27.

Fort Hills is 90 km north of Fort McMurray in the Province of Alberta. Prior to the transaction, TotalEnergies EP Canada held 24.58% working interest in the Fort Hills project. After deal close, TotalEnergies will hold 31.23%.

TotalEnergies EP Canada also holds a 50% working interest in the Surmont project in the region.