Amid a difficult period for the Canadian oil industry, petroleum giant ConocoPhillips on Wednesday (29 March) agreed to divest its oil sands and western Canadian natural gas assets to Cenovus Energy for £10.65bn.

The Calgary-based firm will acquire Texas-based ConocoPhillips' 50% stake in the Foster Creek Christina Lake oil sands unit, as well as a majority stake in the western Canada Deep Basin conventional gas assets.

The acquisition will make Cenovus the largest thermal oil sands producer in Canada and one of the largest oil and gas producers in the country.

For the past two and a half years, the firm has adopted a mission statement to increase cost efficiency and maintain a strong balance sheet.

Brian Ferguson, Cenovus President & Chief Executive Officer, said: "The acquisition is accretive and significantly increases Cenovus's growth potential."

"Going forward, we plan to focus capital spending on these two value platforms. At the same time, we intend to divest a significant portion of our legacy conventional assets to help fund the transaction."

However, shares of Cenovus listed on the New York Stock Exchange slipped more than 8% after hours, Reuters reported.

The Candian oil industry is expected to suffer further losses at least until the fourth quarter of 2017 as the oil market recovers from the plunging price levels of 2016 due to weak global demand and a supply glut from OPEC nations.

Canadian oil companies are projected to incur C$1.1bn in losses this year, compared to the figure of C$8.6bn in 2016.
A stabilising price level has been credited for the general uptick in profits, as the average price for oil barrels is estimated to rise from C$40 in 2016 to C$55 this year.

ConocoPhillips is a Fortune 500 oil and gas firm and the world's largest pure-play exploration and production company.

Cenovus is an integrated oil company that emphasises on innovation, safety, and environmental sustainability.