Cenovus Energy looks to grow as it signs $5.7B deal to buy Athabasca Oil
Athabasca Oil has 40,000 barrels per day of oilsands production currently, but Cenovus Energy sees the opportunity to ratchet that up to 115,000 by 2032.
Cenovus Energy Inc. is expanding its steam-driven oilsands holdings through a $5.7 billion cash-and-stock deal to acquire Athabasca Oil Corp., according to wire material. Currently, Athabasca produces 40,000 barrels of oilsands per day, but Cenovus CEO Jon McKenzie projects this could rise to 115,000 barrels by 2032. The acquisition is seen as one of the most significant organic growth opportunities in Canadian oilsands today.
The deal comes after the federal government designated a proposed million-barrel-a-day pipeline from Alberta to British Columbia as the first national-interest project under recently passed legislation, which means the pipeline will face a streamlined regulatory review. McKenzie attributed the company's ability to accelerate growth to recent government policy shifts, including a recent tax incentive announced by Prime Minister Mark Carney and upcoming royalty incentives from the Alberta government. Cenovus expects to close the deal in December, pending regulatory and shareholder approvals.
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