Cenovus Energy (TSX: CVE) (NYSE: CVE) has reached an agreement to acquire BP PLC’s 50% stake in the BP-Husky Toledo refinery in Ohio for $300 million, allowing for full ownership of the refinery.
Following the merger with Husky Energy in 2021, Cenovus has held a 50% ownership stake in the refinery. The transaction is anticipated to be completed by the end of 2022. Cenovus’ President and CEO, Alex Pourbaix, views the acquisition of BP’s stake as an opportunity for further integration of heavy oil production and refining capabilities.
The purchase price includes $300 million in cash, along with the value of inventory. Additionally, Cenovus and BP have agreed on a multi-year product supply arrangement.
By acquiring BP’s stake, Cenovus will increase its downstream throughput capacity by 80,000 barrels per day, including 45,000 barrels per day of heavy oil refining capacity. This will bring the company’s total refining capacity to 740,000 barrels per day across its assets.
The Toledo refinery, which processes up to 160,000 barrels of oil per day, has been a key contributor to Ohio’s economy for over a century. The acquisition will see over 580 BP refinery employees joining Cenovus at the closing of the deal.
Meanwhile, BP is focusing on offshore growth in Canada, selling its interest in the Sunrise oil sands project in Alberta to Cenovus and acquiring Cenovus’s interest in the Bay du Nord project offshore Newfoundland and Labrador. This shift aligns with BP’s strategy to maximize long-term profitable growth and invest in potential offshore opportunities in Canada.
