Canadian energy companies Suncor Energy Inc. and Petro-Canada have agreed to merge. Upon completion of the transaction, the combined entity will operate corporately and trade under the Suncor name, while maintaining the brand presence of Petro-Canada in refined products. In addition to having the largest oil sands resource position in Canada, the merged company will have the following characteristics:

• A resource base with approximately 7.5 billion barrels of oil equivalent (boe) of proved (developed and undeveloped) and probable reserves, on top of an estimated contingent resource base of approximately 19 billion boe.

• Current crude oil and natural gas production of approximately 680,000 boe per day (boe/d).

• A suite of oil sands growth options for both mined and in-situ resource recovery, as well as value-added upgrading.

• Low-cost international crude oil and natural gas production from the North Sea, North Africa and Latin America.

• Refining capacity of 433,000 barrels per day (b/d)

Under the terms of the Arrangement Agreement entered into between Suncor and Petro-Canada, the proposed merger will be effected by way of a Plan of Arrangement completed under the Canada Business Corporations Act. It will feature a common share exchange through which Petro-Canada common shareholders will effectively receive 1.28 common shares of the merged company for each common share of Petro-Canada they own and each Suncor common shareholder will receive one common share of the merged company for each common share of Suncor they own. The exchange ratio represents an approximate 25% premium for the Petro-Canada shares to the 30-day weighted-average trading price of such shares. On completion of the proposed transaction, Suncor’s existing shareholders will own approximately 60% and Petro-Canada shareholders will own approximately 40% of the merged company.

The merging companies estimate achieving annual operating expenditure reductions of C$300 million. These savings are expected to come from efficiencies in overlapping operations, streamlining business practices, and improved logistics. The companies also expect to achieve annual capital efficiencies of approximately C$1 billion through elimination of redundant spending and targeting capital budgets to high-return, near term projects.

Completion of the proposed merger is conditional on approval of Suncor and Petro-Canada shareholders, compliance with the Competition Act, and satisfaction of other customary approvals including regulatory, stock exchange, and Court of Queen’s Bench of Alberta approvals. The required shareholder approval will be two thirds of the votes cast by holders of Suncor common shares and two thirds of the votes cast by holders of Petro-Canada common shares at meetings of Suncor and Petro-Canada, respectively, held to consider the proposed merger. Suncor and Petro-Canada will defer their annual and general meetings so that combined annual and special shareholder meetings for each of Suncor and Petro-Canada can be held in late May or early June to consider annual shareholder business and the proposed merger. Suncor and Petro-Canada anticipate that the proposed merger will be completed in the third quarter of 2009.

GS Yuasa Corporation and Honda signed a joint venture contract to establish a new joint venture company for manufacturing, sales and R&D of Lithium-ion batteries for hybrid vehicles. (Earlier post.) The new company, Blue Energy Co., Ltd., is scheduled to be established 1 April 2009.

Since the signing of a basic agreement in December of last year, two companies have engaged in a series of discussions to determine concrete plans for the establishment of a joint venture company which will manufacture, sell and conduct R&D for high-performance lithium-ion batteries for applications with a central focus on hybrid vehicles.

The new company will manufacture batteries based on GS Yuasa’s 6Ah-class prismatic Li-ion EH6 cell. The new venture will explore modifying the cathode materials and cell structure to optimize performance for next-generation hybrid vehicles.

GS Yuasa will own 51% of Blue Energy, Honda 49%. GS Yuasa also has a joint venture Li-ion company with Mitsubishi (Lithium Energy Japan, LEJ) to manufacture large-capacity and high-performance lithium-ion batteries targeted for EVs. (Earlier post.)

India-based Ashok Leyland reports it has successfully developed a 6-cylinder, 6-liter 92 kW (123 hp) BS-4 (equivalent to Euro-4) engine for operation with Hythane in association with Eden Energy, Australia. (Earlier post.) Hythane is a blend of natural gas and hydrogen (usually 20% hydrogen by volume).

The addition of hydrogen improves efficiency while retaining the low emission characteristics of CNG.

Concurrently, a 4-cylinder 4-liter 63 kW (84 hp) engine is being developed for H-CNG blend in a joint R&D program with the MNRE (Ministry of New and Renewable Energy) and Indian Oil Corporation.

Ashok Leyland says that application of these engines to buses is at an advanced stage. The company is also in discussions with the government of India regarding making Hythane available for commercial use in the future.

Ashok Leyland pioneered the use of CNG fuel for mass transportation in India by rolling out India’s first CNG bus in 1997 in Mumbai. Today, more than 5,500 Ashok Leyland CNG buses ply on the roads of Delhi, Ahmedabad, Vijayawada and Mumbai as also in certain overseas markets.

Ashok Leyland also developed India’s first MPFI (Multi-Point Fuel Injection) system for high capacity CNG engines in 2008.