Total divests another 3% of Fort Hills to settle unpaid bills
Last summer, Suncor disclosed its spat with Total, who had refused to provide additional funding for cost overruns at the oil sands mine. Capital costs for facility jumped from about $15 to $17 billion due to scope changes in its secondary extraction plant, where solids and water are removed from the bitumen froth, producing a final saleable product.
Suncor says more than 80% of Fort Hills is now operational and has safely run at full capacity over the past four months. All three secondary extraction trains were reported mechanically complete.
First oil has been pushed back to mid-January, with only one secondary extraction train expected to be put into service. The second and third trains are expected to be operational sometime in the first half of this year. Suncor says it remains on track to reach 90% of production capacity by the end of 2018. Last February, the company revised Fort Hills' nameplate capacity to 194,000 bbl/day.
Last fall, Total CEO Patrick Pouyanne called its oil sands operations the most expensive across the company's entire portfolio and hinted at plans to exit Alberta's energy patch once oil prices improve. Aside from Fort Hills, Total also owns a 50% non-operated stake in the Surmont thermal in-situ facility, owned jointly with ConocoPhillips.
Back in 2015, Total sold a 10% stake in Fort Hills to Suncor for $310 million, reducing their stake from almost 40% to 29.2%. Once this latest deal closes, their stake is cut to 26.05%, boosting Suncor's and Teck's share to 53.06% and 20.89%, respectively. Suncor and Teck have provided additional capital funding of $300 million and $120 million, respectively.