bp will increase its acreage position offshore Eastern Canada and sell its 50% non-operated interest in the Sunrise oil sands project in an agreement reached with Calgary-based Cenovus Energy.

Total consideration for the transaction includes C$600 million (Canadian dollars) cash, a contingent payment with a maximum aggregate value of C$600 million expiring after two years, and Cenovus’s 35% position in the undeveloped Bay du Nord project offshore Newfoundland and Labrador.

Starlee Sykes, bp senior vice president, Gulf of Mexico & Canada, said: “This is an important step in our plans to create a more focused, resilient and competitive business in Canada. Bay du Nord will add sizeable acreage and a discovered resource to our existing portfolio offshore Newfoundland and Labrador. Along with bp’s active Canadian marketing and trading business, this will position bp Canada for strong future growth.”

In Canada, bp will no longer have interests in oil sands production and will shift its focus to future potential offshore growth. bp currently holds an interest in six exploration licenses in the offshore Eastern Newfoundland Region. The non-operated stake in the Bay du Nord project will expand bp’s position offshore Eastern Canada.

Subject to regulatory approvals, the transaction is expected to close in 2022.