BP sells oil sands and takes stake in Canadian offshore project

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A tailings pond, a dam and dyke system used in oil sands processing, near Fort McMurray, Alberta, Canada.

Ian Willms/NYT

BP has sold Canada’s oil sands, selling its stake in the Sunrise project to Cenovus Energy Inc. while acquiring the same company’s offshore exploration in the east of the country.

The tar sands phase-out aligns with BP’s plans to divest polluting projects as investors demand increased efforts to tackle climate change. Companies such as Shell and ConocoPhillips have also shed such companies, which have a particularly high carbon footprint due to the energy required to extract bitumen from underground deposits.

Cenovus has agreed to buy BP’s 50% stake in Sunrise for $467 million in cash and a contingent payment of possibly the same amount. The Calgary-based company will also sell its 35% stake in the Bay du Nord oil project off the coast of Newfoundland and Labrador.

BP was down 2.6% in London while Cenovus fell 3.8% in Toronto as of 9:49 a.m. New York time.

“This is an important step in our plans to create a more focused, resilient and competitive business in Canada,” BP senior vice president for the Gulf of Mexico and Canada, Starlee Sykes, said in a statement. a statement. “Bay du Nord will add a significant acreage and discovered resource to our existing portfolio.”

The offshore oil project, operated by Equinor ASA, won Canadian government approval earlier this year despite environmental opposition. The $12 billion development is estimated to have recoverable reserves of around 300 million barrels of oil.

BP plans to reduce its total oil and gas production by 40% by 2030 and says it will focus on “resilient hydrocarbons”, those with a lower cost and carbon footprint. The London-based major also said it would no longer explore fossil fuels in new countries.


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