There’s not much left in the $320-million oil and gas fund from Ottawa following an agreement to help revive the Terra Nova project.
Newfoundland and Labrador has committed to the venture $205-million from the oil and gas fund, the remainder from reduced royalties. West White Rose and Come By Chance also benefitted from the fund, leaving about $32-million in the pot.
Government describes the agreement as a good one for all, especially the workers who will keep their jobs. In addition, Energy Minister Andrew Parsons notes that the province saves itself costs associated with decommissioning of the oilfield.
(Andrew Parsons, file photo.)
He says every project is the same regarding decommissioning costs being borne by both industry and government. It’s a royalty carryback but the difference with Terra Nova is that the costs would have come much sooner than anyone had planned on.
Federal Natural Resources Minister Seamus O’Regan says once again the Atlantic Accord, signed with Ottawa back in the 1980s, played a role. He calls it Newfoundland and Labrador’s economic charter.
He says it’s Newfoundland and Labrador’s resource and the closer that we can get to having people on the ground make the decisions, the better the resource will be managed.
High Hopes for Bay du Nord
(Bay du Nord FPSO concept art, courtesy Equinor.)
Oil and gas activity off Newfoundland has largely been confined to the Jeanne d’Arc Basin but Equinor, a Norwegian company, has high hopes as it ventures beyond the 200-mile limit and into international waters.
Reserves in Bay du Nord on the deep-water Flemish Pass are estimated at a billion barrels.
They’re a long way from any decision on sanction but Rob Strong, an industry consultant who has been working in the offshore industry for decades, says the company is bullish on the field.
It poses many significant challenges because of the distance from shore and water depth among other things.
Strong says while they cannot build the FPSO in Newfoundland and Labrador, there is “phenomenal” potential for the subsea work. He says they’ve committed to conducting most of that work in this province, plus engineering opportunities. Whether building manifolds and templates or running procurement and quality control, there will be lots of work according to Strong.
