NEWS
09/21/2015 11:19 EDT | Updated 09/21/2016 01:12 EDT

Suncor boosts stake in Fort Hills oilsands project to 50.8%

Suncor Energy has boosted its stake in the Fort Hills oilsands project to 50.8 per cent after buying an additional 10 per cent from Total E&P Canada.

Calgary-based Suncor is paying $310 million for the additional stake in the $15-billion project, which is expected to pump its first oil in 2017.

Total SA, parent company of Total E&P, remains the second-largest partner in the project, with a 29.2 per cent interest. Teck Resources Ltd. owns 20 per cent.

Face with the high costs of development, there were doubts about whether the project should go ahead, but it got a green light in 2013.

Total backed out of the Joslyn oilsands project last year, citing cost factors. It has accepted a discounted price for its 10 per cent stake in Fort Hills, which is about 90 kilomatres north of Fort McMurray, Alta.

But Suncor said this initiative will lower its price-per-barrel costs for Fort Hills. This could be important with many analysts predicting oil prices will remain low.

"This opportunity to acquire an additional interest at a discounted price underscores Suncor's confidence in its position within the oilsands," said president Steve Williams.

"We consider this project to be one of the best opportunities for long-term sustainable growth in the industry today, thanks to the exceptional quality of the resource and our disciplined project execution."

Suncor said engineering on the site is 90 per cent complete and construction more than 40 per cent complete. Its planned production capacity is 180,000 barrels per day