Calgary-based Suncor Energy has announced a shakeup in Newfoundland and Labrador’s offshore oil industry, saying it is selling off stakes in three oilfields.

In a statement Sunday, the Calgary-based energy company said it had reached a deal with U.K. based-Ithaca Energy to sell its 48 per cent interest in Terra Nova, 40 per cent interest in White Rose and 38.6 per cent interest in West White Rose offshore assets.

The deal is worth $1.2 billion in upfront cash as well as a contingent payment of up to $350 million based on future oil prices, said the company.

“This transaction further focuses our efforts on opportunities that generate the greatest long-term shareholder value,” Suncor CEO Rich Kruger in the statement.

“We are aligning our portfolio around our competitive advantages and the strengths of our unparalleled, physically-integrated business, underpinned by large-scale, long-life oil sands resources.”

According to the statement, Ithaca “will assume investment commitments and all future liabilities associated with the assets, including a $500-million regulatory well compliance program starting in 2027 at Terra Nova and the total estimated abandonment and lease liabilities of $1.4 billion.”

The statement it said the transaction has an effective date of July 1 and is expected to close early in the new year, and is subject to closing conditions, regulatory approvals and partner consents.

Suncor said it is keeping its interest in N.L.’s oilfields Hebron and Hibernia.

In its own statement, Ithaca said the acquisition is aligned with its growth strategy.

“This acquisition marks the next era of growth for Ithaca Energy as we make our inaugural international acquisition in Offshore East Coast Canada,” said Ithaca executive chairman Yaniv Friedman.

“The transaction delivers on our clear stated growth strategy as we seek to diversify and grow our production and resource base and replicate our success in the United Kingdom Continental Shelf … through disciplined international expansion in regions we believe we can create long-term value for our shareholders.”

‘It’s a huge industry’

Energy Minister Lloyd Parrott wasn’t available for an interview early Monday morning.

Liberal energy critic Fred Hutton said companies selling off stakes isn’t unusual, though he added he was a “little bit of a surprised.”

He told CBC Radio’s The St. John’s Morning Show his party is primarily concerned with the potential impact to jobs, adding the Liberals will raise the subject to Suncor and in the House of Assembly when it reopens in the fall.

Hutton said he hadn’t heard about a deal in advance of Sunday’s announcement but “there’s always talk of movement within this industry. It’s a huge industry.”

Given the percentages announced in the deal, Hutton said Ithaca is “going to be big players here in this, in this province and our oil industry,” and it could be a positive sign a new company is interested in the province.

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