Exclusive: Suncor targets acquisitions in North Sea, Eastern Canada - sources
By John Tilak and Nia Williams
TORONTO/CALGARY (Reuters) - Suncor Energy Inc (SU.TO: Quote) plans to make acquisitions in the North Sea and Eastern Canada to bolster its offshore upstream oil business as assets become available due to the slump in global oil prices, three sources familiar with the process said.
The size of deals could range from several hundred million dollars to a few billion dollars, the sources said, adding that Canada's biggest energy producer does plan a single transformational acquisition.
With a market capitalization of about C$55 billion ($42.95 billion), the company is likely to use its equity as currency for deals, as it did with its $3.31 billion acquisition of Canadian Oil Sands earlier this year, one of the sources said.
Suncor is also looking at downstream targets such as refineries in the United States, said the sources, who did not want to be identified as the matter is private.
Oil sands producers have been struggling with tumbling global crude oil prices, which have slid to their lowest levels since 2003 over worries of a global supply glut.
The shift in mergers and acquisitions strategy would, if successful, expand Calgary, Alberta-based Suncor's reach further beyond the oil sands region, which makes up the majority of its business.
The company reassessed its growth strategy after a massive Alberta wildfire in May that closed much of the Canadian oil sands, the sources said.
While remaining active in the region, it is expected to aggressively pursue deals in the North Sea and Eastern Canada, where it could acquire licenses, the sources said. Rivals Husky Energy HSE.TO, Statoil ASA (STL.OL: Quote) and Shell Canada already own major Eastern Canadian assets. Continued...