Feb. 12 (UPI) -- Independent Norwegian producer Faroe Petroleum said Monday it was bringing a regional subsidiary of Canada's Suncor into operations in the Norwegian Sea.
For $54.5 million, Faroe said it sold a 17.5 percent working interest in the Fenja development in the Norwegian Sea to Suncor. Faroe under the terms of the deal backs down to a 7.5 percent stake and cuts its future capital expenditures at the field to $97 million.
The Norwegian company said it's nevertheless committed fully to the Fenja development.
"Suncor's acquisition of a 17.5 percent stake in Fenja from Faroe confirms our belief in the attractiveness of this project," Faroe CEO Graham Stewart said in a statement.
The plan for development at Fenja anticipates gross recoverable reserves at around 97 million barrels of oil equivalent, of which 72 percent is oil. The field is expected to start production in 2021.
Suncor, for its part, said it expected a $222 million capital commitment. The entire project could cost about $1.3 billion to develop.
VNG Norway is the field's operator, submitting development plans to the Norwegian government in December. Fenja could be in production for 16 years.
VNG Norway had no comment on the transaction.
The Norwegian Petroleum Directorate, the nation's energy regulator, reported that preliminary data show total daily production from December averaged 1.54 million barrels of oil, 363,000 barrels of natural gas liquids and 31,000 barrels of condensate, a super light form of oil. For oil, production was about 4 percent below expectations for December.
Faroe Petroleum has yet to issue its quarterly report. Suncor reported net earnings of $1.3 billion in the fourth quarter, more than double what it recorded in fourth quarter 2016.