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Story by The Wall Street Journal

Suncor Energy Inc. said Monday it had agreed to boost its stake in the Fort Hills oil-sands project in Alberta to 50.8% by acquiring a 10% stake from project partner Total SA for 310 million Canadian dollars ($235 million).

The deal reflects diverging bets on Canada’s oil sands.

“This opportunity to acquire an additional interest at a discounted price underscores Suncor’s confidence in its position within the oil sands,” Suncor Chief Executive Steve Williams said in a statement. Total, meanwhile, said separately that it had decided to reduce its exposure to Canada’s oil sands after looking at its total asset portfolio in the context of lower oil prices.

The sharp drop in oil prices since mid-2014 has roiled energy companies around the globe, forcing many to slash spending to protect their balance sheets. For Total, the sale is part of a vast program to sell not-so-profitable assets to raise cash as the company grapples with the oil collapse. Total had already decided to suspend its Joslyn project in Canada. The company also recently sold a pipeline operator in the North Sea and a gas station chain in Turkey.

Total said the sale of the Fort Hills stake will reduce the capital it will have to invest in the project by $530 million by the end of 2017. Its stake in the project will fall to 29.2% as a result of the sale.

Suncor, the project’s operator, said it could absorb the added spending obligation on Fort Hills without altering its capital-spending plans for the year. In late July, the company slashed another $400 million Canadian dollars from its capital-spending budget and said it planned to spend between $5.8 billion Canadian dollars and $6.4 billion Canadian dollars in 2015, lowering its range from up to $6.8 billion Canadian dollars previously and its original target of up to $7.8 billion Canadian dollars.

“We consider this project to be one of the best opportunities for long-term sustainable growth in the industry today, thanks to the exceptional quality of the resource and our disciplined project execution,” Suncor’s Mr. Williams said. Fort Hills is expected to start producing oil in the fourth quarter of 2017.

Canada’s Teck Resources Ltd. owns a 20% stake in the project. Suncor said Teck had agreed to waive its right of first refusal to purchase a pro-rata share of the offering.