I have been waiting to see what actions are taken by Oil companies to face this hard economic times. One of the first moves is the recently announced merger of two major Oil Companies in Canada: Suncor Energy and Petro-Canada. This post provides an overview of the merger.
The objectives of this merger are to reduce their high operating costs and to jointly face the opposition of environmentalist groups that have been gaining public sympathy. The expected savings for this merger are $300 million during the first year.
Actual Suncor shareholders will hold 60% of the new company and the remaining 40% will be hold by the actual Petro-Canada shareholders.
Key facts about the merged company:
· 7.5 billion barrels of oil equivalent proved and probable reserves.
· 433,000 barrels per day of refining capacity.
Suncor, before the merger, was the third largest oil company in Canada. It employs 6,500 workers and was the first company to commercially mine the Athabasca oil sands. It is an integrated oil company: extraction, refining and retailing.
Petro-Canada, employs around 6,000 workers worldwide. It has an upstream production of 418,400 barrels of oil equivalent per day (boe/d) (2008 data).
Is this merger a signal of future mergers in the US? If so, Which companies will merge in the future?