Suncor begins sale of lubricants business -sources

By Mike Stone
June 16 (Reuters) - Suncor Energy Inc SU.TO has launched
an auction of its Petro-Canada lubricants division, whose white
mineral oils are sprayed on gummy bear candy to make it shiny
and prevent sticking, people familiar with the matter said.
The sale could fetch around $800 million and help Canada's
biggest energy company pay down debt incurred by recent
acquisitions, the people said this week.
Calgary, Alberta-based Suncor, which merged with
Petro-Canada in 2009, is working with Bank of America Corp (NYSE:BAC)
BAC.N on the sale process, said the sources, asking not to be
identified because the matter is confidential.
Suncor did not respond to a request for comment and a
representative for Bank of America declined to comment.
Petro-Canada is the world's largest manufacturer of white
mineral oil, which is used in health and beauty products,
pharmaceuticals, adhesives, plastics and elastomers.
Suncor has been actively acquiring companies during the
two-year slump in oil prices. It spent C$4.24 billion ($3.32
billion) to purchase Canadian Oil Sands in March. In April, it
agreed to pay about C$937 million to buy an additional 5 percent
stake in its Syncrude oil sands joint venture from Murphy Oil (NYSE:MUR)
Corp's MUR.N Canadian unit.
Petro-Canada purchased its lubricants business in 1985 from
Gulf Canada. The unit, based in Mississauga, Ontario, near
Toronto, produces more than 350 advanced lubricants for
industries ranging from beauty to heavy manufacturing.
Over the last nine months, as the price of crude oil has
languished, Suncor has spent about $7 billion (C$9 billion) on
acquisitions and development, giving it a production capacity of
about 164,000 barrels of oil per day.
Last week, Suncor announced plans to raise about $1.9
billion (C$2.5 billion) in equity by selling 71.5 million of its
shares. The offering is expected to close in June
22.
Suncor's competitor Imperial Oil Ltd IMO.TO , Canada's No.
2 integrated oil producer and refiner, raised capital through
the sale of 497 Esso gas stations for about C$2.8 billion.