LONDON, March 1 Reuters Norway39;s Equinor is close to reaching a deal to buy Suncor Energy39;s British North Sea oil and gas assets for around 1 billion, three sources familiar with the matter told Reuters on Wednesday.

The deal includes Suncor39;s 40 stake in the Equinoroperated offshore Rosebank oil and gas project, located some 130 km 80 miles northwest of Shetland Islands, and one of the largest developments in the ageing basin.

Equinor and its partners are expected to make a final investment decision on Rosebank39;s development later this year.

Equinor, which already owns 40 of Rosebank, had previously estimated the project39;s cost at about 4.3 billion pounds 5.22 billion. Londonlisted Ithaca Energy holds the remaining 20 in the Rosebank development.

Equinor and Suncor, Canada39;s No. 3 energy company, declined comment. The sources asked not to be identified as discussions are confidential.

The deal follows the British government39;s decision late last year to increase a windfall tax on North Sea oil and gas producers to 35 from 25, bringing the total tax rate to 75, one of the highest in the world.

The windfall tax led many companies, including Equinor, to warn that they could reduce their UK North Sea investments.

The acquisition of the Suncor assets gives Equinor a large amount of tax losses that it could use to offset future investments in the basin, the sources said.

Suncor flagged plans to divest its upstream assets in Britain last August as the…