Suncor Energy has boosted its stake ^1 in the Fort Hills oilsands project to 50.8 percent after buying an additional 10 per cent from Total E&P Canada.
Calgary-based Suncor is paying $310 million for the additional stake in the $15-billion project, which is expected ^2 to pump its first oil in 2017.
Total SA, parent company of Total E&P, remains the second-largest partner in the project, with a 29.2 per cent interest. Teck Resources Ltd. owns 20 per cent.
Face with the high costs of development, there were doubts ^3 about whether the project should go ahead, but it got a green light in 2013.
Total backed out of the Joslyn oilsands project last year, citing ^4 cost factors. It has accepted a discounted price for its 10 per cent stake in Fort Hills, which is about 90 kilomatres north of Fort McMurray, Alta.
But Suncor said this initiative ^5 will lower its price-per-barrel costs for Fort Hills. This could be important with many analysts ^6 predicting oil prices will remain low.
"This opportunity ^7 to acquire ^8 an additional interest at a discounted price underscores ^9 Suncor's confidence in its position within the oilsands," said president Steve Williams.
"We consider ^10 this project to be one of the best opportunities for long-term sustainable growth in the industry ^11 today, thanks to the exceptional ^12 quality of the resource ^13 and our disciplined ^14 project execution ^15."
Suncor said engineering on the site is 90 percent complete and construction more than 40 percent complete. Its planned production capacity is 180,000 barrels per day