Suncor Energy Inc.'s assets in Norway have long been under investors' radar , so the oil sands producer raised some eyebrows this week when it spent time explaining what it now calls a "principal exploration theatre."
At the company's inaugural investor day, executives talked up offshore Norway as the next core piece of a traditional exploration and production business in which numerous assets have been sold to cut debt since 2009.
"We're building our capability there, and we're establishing Norway as a footprint into exploration, where we intend to grow it organically," exploration and production vice-president François Langlois said at the meeting. "We've had success so far and we hope to make that into a material presence."
Of course, Suncor is much better known for its sprawling oil sands business. It is Canada's largest with both major mining and steam-driven projects, and executives have always focused on those holdings as being the ones to watch.
However, its exploration and production division has large stakes in producing fields off the Newfoundland coast and in the British North Sea, where it is a partner with Nexen Inc. in the Buzzard project.
Since the Petro-Canada takeover, Suncor has divested assets pumping 130,000 barrels of oil equivalent a day. This year, following a major sale of natural gas assets, Suncor's E&P unit produces about 150,000 barrels a day from conventional holdings, and much of that is linked to Brent crude pricing.
Suncor has amassed 15 licences in offshore Norway, and each has several drilling prospects, Mr. Langlois said. It has made four discoveries from seven wells and is appraising two of them.
Suncor's net recoverable reserves at finds called Beta, Butch and Fogelberg amount to 147 million barrels of oil equivalent, according to FirstEnergy Capital Corp. analyst Mike Dunn.
Meanwhile, Talisman Energy Inc. has its Norwegian assets on the block, and Mr. Dunn said he would not be surprised if Suncor bought its 30 per cent interest in the Beta discovery area, northwest of Stavanger in the North Sea.
Talisman paid $192-million (U.S.) for 20 per cent of that stake and an interest in another play three years ago.