UPDATE 2-Total, Suncor in $1.8 bln Canada oil sands deal

* Total, Suncor to pool investments in three projects

* Total to pay $1.8 bln for stakes, past project costs

* Canadian tar rush reflects a quest for new oil supplies

(Adds more details, background)

By Tim Hepher and Marie Maitre

PARIS, Dec 17 (BestGrowthStock) – France’s Total (TOTF.PA: ) said on
Friday it would spend C$1.75 billion ($1.8 billion) to forge a
partnership with Suncor Energy (SU.TO: ) in Canada’s oil sands,
the latest foreign push into a booming new source of oil wealth.

The French oil giant and Canada’s largest energy company
announced deals encompassing three projects in Alberta, where
Asian investors have already been pouring funds into tarry
deposits which have opened a new frontier in oil supplies.

Total said it would buy 19.2 percent of Suncor’s interest in
the Fort Hills project, raising to 39.2 percent its stake in the
mining project. Suncor, with a 40.8 percent stake, will remain
operator of the venture near Calgary.

Suncor will acquire 36.75 percent of Total’s interest in the
Joslyn project, where operator Total will retain 38.25 percent.

Total is buying 49 percent of the Suncor-operated Voyageur
project near Fort McMurray, where construction stopped in 2008.

“Suncor and Total have agreed to a joint commitment to
develop Fort Hills and Voyageur in parallel so that both come on
stream early 2016,” the companies said in a statement.

The moves came as Suncor unveiled a 10-year growth strategy
including plans to increase oil production [ID:nSGE6BG034].

Total’s deal with Suncor follows its C$1.5 acquisition in
July of UTS Energy Corp, a takeover that gave Total a 20-percent
stake in Fort Hills. [ID:nSGE66609U]

Total, the fifth-largest Western oil company by market
value, already has significant investments in Canada, where it
plans to spend as much as C$20 billion over the next 15 years.

Technical challenges mean the cost of producing the tarry
bitumen trapped in sand and clay is high, making investments in
new projects feasible only if oil prices are at about $80 a
barrel. Oil was at $88.05 a barrel early on Friday.

Alberta’s oil sands are seen as the largest potential source
of crude outside the Middle East and are the target of billions
of dollars of spending by the world’s oil industry. Chinese,
South Korean and Thai investors have contributed to the Canadian
tar rush with a wave of acquisitions.

But developments in the region are bitterly opposed by
environmental groups concerned about rising greenhouse gas
emissions and water pollution. [ID:nN15195142]

Total has interests in the Surmont project, with
ConocoPhillips (COP.N: ), and in the Northern Lights project
through its 2008 acquisition of Synenco Energy.

Total shares were up 0.4 percent at 40.05 euros by 1000 GMT,
giving the company a market value of just under 94 billion euros
($125.1 billion).

UPDATE 2-Total, Suncor in $1.8 bln Canada oil sands deal