CALGARY – Cenovus Energy Inc. is looking to trim down its refining business with a $1.9-billion deal to sell half interests in two U.S. refineries to joint-venture partner Phillips 66.
“This transaction aligns with our strategy of owning and operating the assets that are core to our business,” Cenovus chief executive Jon McKenzie said in a news release Tuesday.
After the sale of its 50 per cent stake in WRB Refining LP, Cenovus will have a refining business comprised of assets that it controls and are well integrated with its vast oilsands operations in Alberta, McKenzie said.
“The proceeds from this transaction will allow us to accelerate shareholder returns over the near term,” McKenzie said.
The operations in Wood River, Ill., and Borger, Texas, can churn out 495,000 barrels per day, 247,500 of which belong to Cenovus.
Once the deal is complete, Cenovus said its downstream business will have total crude throughput capacity of 472,800 barrels per day. The business still includes a refinery and oilsands upgrader in Lloydminster, on the Alberta-Saskatchewan boundary, as well as two refineries in Ohio and one in Wisconsin.
The deal is expected to close around the end of the third quarter, subject to customary closing conditions.
Cenovus shares rose about 2.6 per cent to $22.70 in late morning trading on the Toronto Stock Exchange.
The refinery deal comes as Cenovus looks to take over its smaller oilsands peer MEG Energy Inc. with a cash-and-stock offer worth almost $8 billion including debt. The two companies have side-by-side operations at Christina Lake, south of Fort McMurray, Alta., and have touted the cost savings and efficiencies that could be achieved by joining forces.
MEG has agreed to the friendly Cenovus offer, but still faces a hostile bid all-stock bid from fellow oilsands operator Strathcona Resources. The sweetened Strathcona offer was worth about 11 per cent more than the one from Cenovus on a per-share basis before it was announced Monday.
This report by The Canadian Press was first published Sept. 9, 2025.
Companies in this story: (TSX:CVE)
