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ConocoPhillips has forged a deal to sell some of its Canadian portfolio to Cenovus for $13.3bn, the latest move by a large energy company to pull away from oil sands projects.

Texas-based ConocoPhillips said it will sell its 50 per cent stake in the Foster Creek Christina Lake oil sands partnership as part of the pact. The company will also sell the majority of its western Canada Deep Basin gas assets as part of the deal.

The group’s shift away from oil sands, which typically face higher breakeven crude prices than shale prospects available elsewhere in North America, follows a similar decision earlier this month by Royal Dutch Shell.

ConocoPhillips will receive $10.6bn in cash, and 208m Cenovus shares, which were valued at $2.7bn on March 28.

Cenovus, an integrated energy group based in Canada, has significant expertise in dealing with the complexities of drilling in oil sands. That has become particularly important with oil prices hovering around $50 a barrel — a far cry from the levels north of $100 recorded before the tumble in 2014.

“This is a significant, win-win opportunity for ConocoPhillips and Cenovus,”
said ConocoPhillips chief executive Ryan Lance.

Mr Lance said the deal would have “an immediate and significant impact” on the group’s target of reducing its debt load to $20bn. ConocoPhillips said it would put the cash proceeds from the sale towards paying back its debt, as well as increasing the level and pace of share buybacks.

ConocoPhillips shares rallied 5.7 per cent in after-hours trading in New York.

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