Canada’s Suncor Energy Inc. (SU) has entered into an agreement with Britain’s Centrica Plc. (CPYYY) – the parent company of British Gas – to sell its Trinidad & Tobago gas assets for $380 million (C$396 million) in cash.
Current production is approximately 60 – 70 million cubic feet of natural gas equivalent per day to Suncor from its 17.3% interest in Trinidad’s North Coast Marine Area block NCMA-1. Additionally, the sales agreement includes equity in three additional blocks: Block 22 and Blocks 1a and 1b. The transaction is expected to close by the end of first quarter 2010.
For Suncor, the deal with Centrica is part of the company’s strategy to divest an array of non-core overseas assets (some of which it acquired through its acquisition of Petro-Canada) to fund its core oil sands development projects in western Canada. In fact, Suncor is targeting asset sale of up to C$4 billion in 2010, as it looks to reduce debt following the Petro-Canada acquisition.
The company plans to put more of its assets up for sale in Western Canada, the U.S. Rockies, and certain North Sea assets, including all assets in The Netherlands, in order to streamline the business. To date, including this sale, Suncor has divested around $1.3 billion in non-core assets.
Calgary, Alberta-based Suncor is one of the leading Canadian integrated oil and gas companies engaged in crude oil and natural gas production, as well as in refining and marketing. The company’s upstream business is primarily focused on producing synthetic crude oil from Alberta’s oil sands. Suncor’s business can be divided into three segments: Oil Sands, Natural Gas, and Energy Marketing & Refining.
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