Suncor Energy (SU) to Acquire 30% Interest in North Sea Rosebank Project

August 9, 2016 4:51 PM EDT

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Suncor Energy UK Limited (NYSE: SU) today announced it will acquire a 30 per cent participating interest in the U.K. North Sea Rosebank project from OMV (U.K.) Limited.

Under the terms of the agreement, Suncor will make an initial payment of US$50 million on closing. The transaction is subject to conditions, including regulatory approval, and is anticipated to close in the fourth quarter of 2016.

In the event the co-venturers approve the Rosebank project final investment decision and Suncor elects to participate, Suncor could pay additional consideration to OMV (U.K.) Limited of up to US$165 million, subject to adjustments according to the terms of the agreement.

The Rosebank project, located approximately 80 miles (130 kilometres) northwest of the Shetland Islands in water depths of approximately 3,600 feet (1,110 metres), was discovered in December 2004 and is considered one of the best and largest remaining undeveloped resources in the U.K. North Sea. The project is currently in the Front End Engineering and Design (FEED) phase and has a design capacity of 100,000 barrels of crude oil and 80 million cubic feet of natural gas per day.The project is expected to be complementary to Suncor's existing UK portfolio. Subsequent to the successful close of this transaction, joint venture parties would be operator Chevron North Sea Limited (40 per cent), Suncor (30 per cent), OMV (U.K.) Limited (20 per cent) and DONG E&P (U.K.) Limited (10 per cent).

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