Suncor plans to sell assets worth $3.7 billion

Suncor Energy Inc, Canada's oil sands company that turned out to be the largest integrated energy player in Canada following its acquisition of oil and gas major Petro-Canada, outlined its plans to sell non-core assets worth $3.7 billion in order to support long-term growth in core oil sands business.

As per the strategic business alignment, Suncor intends to divest certain natural gas assets in Western Canada and the US Rockies, all Trinidad and Tobago assets, and certain non-core North Sea properties, the company said in a statement on Friday.

Calgary-based Suncor is the fifth-largest integrated energy company in North America, combining a leading position in Canada's oil sands with complementary operations in refining and marketing, natural gas production, overseas and offshore operations. The company is also a prominent player in Canada's emerging renewable energy industry with wind power and biofuels production. Its shares are listed on the Toronto and New York stock exchanges.

Suncor announced the acquisition of rival Petro-Canada earlier in March. (See: Canadian oil-sands firm Suncor to acquire Petro-Canada for $13.7 billion)
The sale of assets would result in about 10-per cent drop in Suncor's current production of 630,600 barrels of oil equivalent per day, which the company expects to compensate by new projects.

On completion of the natural gas portion of the divestment, the company, in addition to providing a solid foundation to the core oil sands operations, targets a low-cost position among North American natural gas producers, with growing focus on unconventional gas.

The company intends to keep its 12 per cent stake in Syncrude, operator of the world's largest oil sands facility in Alberta. A decision on the assets in Libya and Syria, which Suncor acquired through Petro-Canada, is expected later.

Analysts believe that the company could reduce its debt burden of $12.4 billion through the planned asset sale which could be materialised in 2010.