New York  - Canadian oil companies Suncor Energy Inc and Petro-Canada Monday announced a merger worth about 15.4 billion US dollars that would create the country's largest energy company and provide protection against any foreign buyouts.

Suncor is the world's second-largest oil-sands producer, and Petro-Canada is the country's second-largest refiner. The steep decline in global oil prices last year made the merger inevitable.

Suncor reported its first quarterly loss in its history in January.

Under the proposed merger, the new entity will operate under the Suncor name.

Petro-Canada equity holders would receive 1.28 shares in the new company for each Petro-Canada share, or a 40-per-cent stake in the merged company. Suncor shareholders would own the remaining 60 per cent.

"This merger creates a made-in-Canada energy leader with the assets, cost structure and financial strength to compete globally," said Suncor chief executive Rick George, who will have the same role in the merged company.

"The combined portfolio boasts the largest oil-sands resource position, a strong Canadian downstream brand, solid conventional exploration and production assets and low-cost production from Canada's east coast and internationally."

Suncor extracts oil-soaked sand in northern Alberta, as opposed to drilling for oil, and processes bitumen into synthetic crude. The oil is shipped to refiners in southern Canada and the US Midwest for processing into gasoline, diesel, jet fuel and chemicals.

The merger will help the companies save an estimated 245 million dollars annually. The two companies have about 13,000 employees, and some job cuts are expected.

"The increased scale provides more stability in volatile markets, plus the financial and organizational capability to successfully take on large-scale projects in the future," said Petro-Canada chief executive Ron Brenneman, who will take over as executive vice chairman in the merged company.

The acquisition is expected to be completed in the third quarter. (dpa)