BP expands oil sands outflows and expands Canadian offshore footprint


BP will sell its unoperated 50% stake in the Sunrise oil sands project to partner Cenovus Energy for up to $1 billion. The total transaction consideration includes $466 million (C$600 million) in cash, a contingent payment with a maximum aggregate value of $466 million (C$600 million) expiring after 2 years, and the position 35% stake in Cenovus in the undeveloped Bay du Nord project off the coast of Newfoundland and Labrador. The deal is expected to close in 2022.

“This is an important step in our plans to create a more focused, resilient and competitive business in Canada,” said Starlee Sykes, BP Senior Vice President, Gulf of Mexico and Canada. “Bay du Nord will add significant acreage and a discovered resource to our existing offshore Newfoundland and Labrador portfolio. Together with BP’s active Canadian marketing and trading activities, this will position BP Canada for strong future growth.

The sale of its stake in Sunrise will leave BP without a stake in the Canadian oil sands. In 2017, Shell made a similar move by selling its 60% stake in the Athabasca oil sands to Canadian Natural Resources for $8.5 billion.

At the same time, Marathon sold its Canadian subsidiary to Canadian Natural Resources and Shell for $3 billion. The Marathon unit held a 20% interest in the Athabasca oil sands project. The completion of the agreements left Shell with no in situ and undeveloped interests in the oil sands in Canada.

BP currently holds an interest in six exploration licenses in the eastern Newfoundland offshore region. The non-operated stake in the Bay du Nord project will expand bp’s position offshore Eastern Canada.

The project includes several oil discoveries in the Flemish Pass Basin, some 500 km northeast of St. John’s, Newfoundland and Labrador. The first discovery was made by Equinor in 2013, followed by additional discoveries in 2015, 2016 and 2020.

Discoveries confirmed in 2020 in the adjacent exploration license EL1156 (Cappahayden and Cambriol East), where BP is already a partner, are potential links in a joint project development. The discovery of Baie du Nord is at 1170 m of water. New discoveries are made in shallower waters. Equinor plans to develop the Bay du Nord field using an FPSO, which is also a solution for connecting adjacent discoveries and other prospects.

According to Equinor, the partners are working towards a final investment decision with first oil expected to be produced in the late 2020s.


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