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., a major player in Canada's oilsands industry, has announced a $5.7 billion cash-and-stock deal to acquire Athabasca Oil Corp. The company's CEO, Jon McKenzie, expressed optimism about the strategic value of the acquisition, noting that Athabasca currently produces 40,000 barrels of oilsands per day, with the potential to increase that capacity to 115,000 barrels by 2032.
The acquisition comes in the wake of recent government policy changes that may expedite production growth. McKenzie highlighted the federal government's recent designation of a proposed million-barrel-a-day pipeline project as a national interest project, which will undergo a streamlined regulatory review. McKenzie attributed this as a positive move for the sector's competitiveness, and further emphasized the impact of recent tax incentives announced by the federal and Alberta governments, which he believes will further accelerate growth projects at Cenovus.
The transaction is subject to shareholder and regulatory approvals and is expected to close in December.
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