bp sells its Sunrise oil sands interest to Cenovus, picks up interest in Bay du Nord project
14 June 2022
bp has agreed to sell its 50% interest in the Sunrise oil sands project in Alberta, Canada, to Calgary-based Cenovus Energy, the other owner of the Sunrise project. As part of the deal, bp is acquiring Cenovus’s interest in the Bay du Nord project in Eastern Canada, adding to its sizeable acreage position offshore Newfoundland and Labrador.
In Canada, bp will no longer have interests in oil sands production and will shift its focus to future potential offshore growth. bp currently holds an interest in six exploration licenses in the offshore Eastern Newfoundland Region. The non-operated stake in the Bay du Nord project will expand bp’s position offshore Eastern Canada.
The Sunrise project was originally being jointly developed by Husky Energy and BP; Husky operated the field. The Sunrise field was estimated to hold 3.7 billion barrels of bitumen including 0.36 billion barrels of proved, 2.48 billion barrels of probable and 0.86 billion barrels of possible reserves. Cenovus acquired Husky in January 2021.
Sunrise is about 60 kilometers northeast of Fort McMurray, Alberta. The reservoir at Sunrise sits about 200 meters below the surface.
The Bay du Nord project (BdN) consists of several oil discoveries in the Flemish Pass basin, some 500 km northeast of St. John’s in Newfoundland and Labrador, Canada. The first discovery was made by Equinor in 2013, followed by additional discoveries in 2015, 2016 and 2020. The Bay du Nord discovery is at a water depth of approximately 1170 meters whilst the new discoveries are at approx. 650 water depth.
Cenovus Energy was Equinor’s partner in the Bay du Nord discoveries. bp is Equinor’s partner in the Cappahayden and Cambriol Central discoveries.
Total consideration for the transaction includes C$600 million (US$465 million) cash, a contingent payment with a maximum aggregate value of C$600 million expiring after two years, and Cenovus’s 35% position in the undeveloped Bay du Nord project offshore Newfoundland and Labrador.
Subject to regulatory approvals, the transaction is expected to close in 2022.