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From CBC News
Company says it ‘cannot safely execute’ exploration because of COVID-19 pandemic
In another blow to Newfoundland and Labrador’s offshore oil industry, an exploration drilling campaign planned this year for the Flemish Pass has been delayed because of the global pandemic.
That’s a setback for an industry hoping to expand the province’s oil industry into a new, deepwater basin.
In a statement to CBC News, CNOOC International confirmed that plans to drill what’s known as the Pelles well has been delayed.
“We have concluded that given that we are in the early stages of our exploration program, we cannot safely execute offshore in Atlantic Canada in the near term due to the COVID-19 pandemic,” the statement reads.
The decision follows a similar move by Equinor and its partners to defer the Bay du Nord project, also located in the Flemish Pass.
However, Equinor cited plummeting oil prices for its decision.
CNOOC — which stands for China National Offshore Oil Corporation — did not reference challenging market conditions in its statement, and CBC has requested more information from the company.
“Like all organizations, we continue to respond to the evolving COVID-19 crisis. Maintaining the safety and well-being of our workforce remains our top priority,” CNOOC wrote.
The company called the decision to delay its drilling campaign “difficult but necessary.”
However, the company said it remains “fully committed to Newfoundland and Labrador.”
“We continue to assess appropriate timing and next steps to safely execute our exploration program in the Flemish Pass,” reads the statement.
CNOOC is one of the largest national oil companies in China.
It had contracted the Stena IceMax drill ship to carry out its drilling campaign. The ship has never operated in Newfoundland’s offshore, but has worked for Shell Canada in Nova Scotia’s offshore.
The IceMax was scheduled to drill three wildcat wells for CNOOC this year, at a reported day rate of $299,000.
CBC has learned that workers began receiving messages early this morning, saying the exploration campaign was being postponed.
The IceMax was scheduled to start drilling the Pelles A-71 location in early April, with the rig having completed some maintenance at a shipyard in the Canary Islands, off northwestern Africa, where the vessel is still anchored.
“CNOOC had mobilized people from all over the world for this project and now they are at a standstill,” said a source close to the project.