Suncor Energy Inc. will acquire Petro-Canada for 19.12 billion Canadian dollars (US$15.5 billion), uniting two of Canada's biggest oil companies as the nation's energy industry retrenches. If the deal announced Monday is approved, the combined company would be the largest oil company in Canada and have a market capitalization of about CA$48 billion (US$38 billion.) That's much smaller than global heavyweights such as Exxon Mobil and ConocoPhillips, which boast market capitalizations of US$326.6 billion and US$55.97 billion respectively, but the company would have some of the same benefits of scale. The companies said they could save CA$300 million (US$244 million) in operating costs and CA$1 billion (US$812 million) in capital efficiencies each year. “We're in a period here where financial uncertainty is very high on a worldwide basis. We have big time volatility of commodity prices and there's no assurance of where we go from here,” said Rick George, president and chief executive officer of Suncor, who will continue in those roles in the new company. “The super majors, particularly Exxon and Shell, can invest through the bottom part of the cycle and are improving their positions in Canada. We at Suncor have two options. We can pull back, which we obviously did on a capital basis, or we do something that would really strengthen our position and allow us to come out of this cycle stronger than ever,” he said. __
