ConocoPhillips makes $13.3 billion Canada oil sands divestment

ConocoPhillips makes $13.3 billion Canada oil sands divestment

US-based ConocoPhillips (NYSE:COP) has announced the US$13.3 billion sale of its oil sands assets in Western Canada to Cenovus Energy (NYSE:CVE).

Conoco, the world’s largest independent oil and gas explorer, said the sale would allow it to repay debt and return cash to its stakeholders, while also cutting the cost of its production from around $40 to $35 per barrel.

Chairman and chief executive officer Ryan Lance said: ““This is a significant, win-win opportunity for ConocoPhillips and Cenovus.

“This transaction will make an immediate and significant impact on the company’s value proposition by allowing us to rapidly reduce debt to $20 billion and double our share repurchase authorisation to $6 billion.”

Under the deal, Calgary-based Cenovus will assume Conoco’s 50% stake in the Foster Creek Christina Lake oil sands partnership and the majority of its Western Canada Deep Basin gas assets.

The firm will retain its 50% stake in the Surmont oil sands joint venture with Total (LSE:TTA), but heavy Canadian crude will drop from 15% to 5% of its total production.