By Bernard Simon in Toronto and Ed Crooks in London
Published: March 24 2009 02:00 | Last updated: March 24 2009 02:00
Suncor Energy of Canada is to buy rival Petro-Canada for C$19.6bn (£11bn) in an agreed all-share deal that will create North America’s fifth biggest oil and gas producer and accelerate consolidation in the Alberta oil sands.
The largest deal in the oil and gas industry since 2006 comes amid troubled times for operators in bitumen-like oil sands, which cover an area the size of Florida and contain the world’s second-biggest oil reserves after Saudi Arabia.
Industry estimates suggest existing projects need an oil price of about $40 a barrel to cover their costs, but a new project with substantial investment could need close to $100 a barrel to be commercially viable.
Besides the difficulty of extracting the oil, labour and equipment costs soared during the energy boom. Numerous projects have been delayed or shelved since the collapse in the oil price.
Suncor’s shareholders will own about 60 per cent of the merged company, with Petro-Canada’s holding 40 per cent. Suncor’s offer represents a premium of about 25 per cent on PetroCanada’s recent share price.
Rick George, Suncor’s chief executive, said yesterday that the combined company “will be very focused in Canada, very focused on oil sands”. Much of its oil sands production will be channelled through its five refineries.
Mr George added that the enlarged Suncor would be in a strong position to match bigger rivals, such as Exxon and Royal Dutch Shell, in continuing to invest during the downturn in commodity prices.
Suncor is the second-biggest oil sands producer. Petro-Canada is more diversified with stakes in several oil sands projects, more than 1,300 retail outlets, and operations off the east coast of Canada, in the North Sea, Libya, Syria and the Caribbean.
Suncor and Petro-Canada said that their deal would cut C$300m a year in operating outlays, and save C$1bn in capital budgets.
CIBC World Markets and Morgan Stanley acted as financial advisers to Suncor. Petro-Canada retained RBC Capital Markets and Deutsche Bank.
Suncor shares fell 0.5 per cent to close at C$30.74 yesterday. Shares in Petro-Canada climbed 20.4 per cent to C$35.70.
Lex, Page 16 Partner in tango, Page 21
Copyright The Financial Times Limited 2009
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
MORE DETAILS:
A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
