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A pedestrian is reflected in a Suncor Energy sign in Calgary, Monday, Feb. 1, 2010.

Jeff McIntosh/THE CANADIAN PRESS

Suncor Energy Inc. and Teck Resources Ltd. are getting a bargain price for bigger stakes in the Fort Hills oil sands mine they are buying from partner Total S.A., analysts say.

The two Canadian companies announced Wednesday they will pay an additional $420-million to take over a three per cent stake in the project from the French oil giant.

Suncor, the operator, is paying about $300-million to increase ownership to 53.06 per cent and Teck is paying $120-million to up its stake to 20.89 per cent. Total's share is falling to 26.05 per cent from 29.2 per cent.

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"We're pleased to have reached this agreement and taken a bigger stake in what is arguably the best long-term growth project in our industry," Suncor CEO Steve Williams said in a statement.

Analysts said Thursday the price of about $69,000 per daily barrel of production for the Total share is much less than the $90,000 per daily barrel cost of the overall project, which is designed with capacity of 194,000 barrels per day of bitumen.

Suncor and Teck said the deal settles a dispute triggered last year when Total refused to take part in a project to spend an additional $1-billion in 2017 to accelerate construction. The French company said at the time it would not accept "substantial cost increases" at Fort Hills.

Last February, Suncor said delays caused by the Fort McMurray wildfire in 2016, along with construction changes to boost capacity, had added from $1.4-billion to $1.9-billion to Fort Hills' estimated cost, taking it to between $16.5-billion and $17-billion.

Total has recently been reluctant to spend money on the oilsands, which have been attacked by environmentalists as being among the dirtiest sources of energy in the world and considered among the most expensive to develop.

It sold a 10 per cent stake in Fort Hills to Suncor in 2015 and, a year before that, agreed with partners to shelve the proposed $11-billion proposed Joslyn oil sands mine. It also sold its 49 per cent stake in the stalled Voyageur oilsands upgrader to Suncor.

Other foreign companies selling oil sands assets in the past two years include Americans Marathon Oil, Murphy Oil and ConocoPhillips, Norway's Statoil and British-Dutch oil giant Royal Dutch Shell.

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Fort Hills was expected to begin producing bitumen by year-end, but Suncor confirmed it will miss that target by two or three weeks. It is expected to reach output of about 90 per cent of capacity by the end of 2018.

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