Energy In-depth: Murphy Oil completes $746 million sale of Syncrude Canada

Editor’s note: Each Friday, Talk Business & Politics provides “Energy In-depth,” a round-up of energy and regulatory news.

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MURPHY OIL COMPLETES $746 MILLION SALE OF SYNCRUDE CANADA, WILL PAY DOWN DEBT
Murphy Oil Corp. announced Thursday that its Canadian subsidiary has closed on the sale of the company’s Syncrude Canada operation to Suncor Energy Inc. for $746 million. The deal, first announced on April 27, will allow Murphy to divest its 5%, non-operated stake in Syncrude, a joint venture company located in Alberta, Canada, that produced an averaged 15,600 barrels of oil equivalent per day in first quarter 2016.

Syncrude, one of the world’s largest producers of synthetic heavy crude from Canada’s oil sands, was a joint venture project that included Suncor, Murphy Oil, China’s Sinopec and a host of other smaller Canadian oil companies. Suncor’s stake in Syncrude will now increase from 48.74% to 53.74%, giving the Calvary oil company the majority interest in the joint venture.

For Murphy, the sale of Syncrude allows the cash-strapped El Dorado oil giant to continue to pay down debt, increase cash flow and strengthen its balance sheet in the wake of depressed international crude oil and natural gas prices. As a result of the sale and recent wildfires in the Syncrude region, Murphy’s second quarter production guidance will be reduced by 8,400 barrels oil equivalent per day.

INTERIOR DEPARTMENT ANNOUNCES FIRST STEP TO DEVELOP WIND FARMS IN HAWAII’S OFFSHORE WATERS
As part of President Obama’s Climate Action Plan to create American jobs, develop clean energy sources and cut carbon pollution, the U.S. Department of Interior announced the first step on Wednesday to support wind energy development in federal waters offshore Hawaii.

In consultation with the Hawaii Intergovernmental Renewable Energy Task Force, Interior’s Bureau of Ocean Energy Management (BOEM) issued a Call for Information and Nominations (Call) to gauge the offshore wind industry’s interest in acquiring commercial wind leases in two areas spanning approximately 485,000 acres of submerged lands in federal waters offshore Oahu.

To date, BOEM’s offshore program has identified wind energy areas in federal waters off seven Atlantic states and awarded 11 commercial wind energy leases off that coast. Nine of those leases were issued as a result of competitive lease sales that generated about $16 million in winning bids for more than one million acres. Earlier this month, BOEM announced it will propose an offshore wind lease sale for an area offshore New York.

SOUTHWEST POWER POOL SEEKS PANELISTS TO REVIEW GRID CONSTRUCTION PROJECTS
Southwest Power Pool is accepting applications to serve on an independent panel to review transmission construction proposals in 2017. In response to the Federal Energy Regulatory Commission’s Order 1000, SPP formed a panel of industry experts that will review, rank, and score proposals for competitive transmission projects approved for construction by the SPP board of directors.

In April, after scoring 11 competitive proposals, the SPP board chose Mid-Kansas Electric Cooperative to be designated as the transmission owner responsible for construction of the “Walkemeyer” project, an estimated 22.6-mile, 115 kilovolt (kV) line from Walkemeyer to North Liberal in western Kansas. Oklahoma Gas and Electric was designated as an alternate if Mid-Kansas is unable to construct the project.

Applications for panel positions will be accepted through Sept. 1, 2016. Selection of panelists – based on a recommendation by the SPP oversight committee – will be approved by the SPP board of directors later this year.