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Saturday, May 30th, 2020

Suncor says ‘no decision made’ on Eastern Canada oilfield

Federal and provincial officials holding conversations with operator to support project

Canadian integrated Suncor Energy on Tuesday downplayed media reports that the Terra Nova oilfield off the eastern Canadian province of Newfoundland and Labrador would remain shut-in through 2022.

“I want to be clear that no decisions have been made to shutdown production operations on Terra Nova until 2022,” Suncor spokesperson Jessica Despencier said in an emailed statement.

The field has been offline since December, when regulators found fire water pump systems aboard the Terra Nova floating production, storage and offloading (FPSO) vessel did not meet safety standards.

In a Covid-19 briefing on Tuesday, Newfoundland and Labrador Premier Dwight Ball, referencing reports that the field would be offline through 2022, told journalists the province was “working closely” with the Terra Nova partners to support the development.

Ball said the field remains “extremely important” to Newfoundland and Labrador, where the oil and gas industry accounts for more than 30% of the province’s gross domestic product. On a percentage basis, Terra Nova generates the highest share of royalties over any other field. Hibernia, which is operated by ExxonMobil, generates the highest share in terms of dollar value, Ball said.

“We will do everything we can to support this industry,” he told reporters.

At the federal level, Canadian Natural Resources Minister Seamus O’Regan said via Twitter that his staff had been talking to Suncor throughout the day.

“And we will work with them to minimise impacts on the workers and their families,” O’Regan said.

The company operates Terra Nova with a 38% stake and is partnered by ExxonMobil, Equinor, Husky Energy, Murphy Oil, Mosbacher Operating and Chevron.

In November 2019, the month before Terra Nova was shut in, production averaged about 29,800 barrels per day.

Suncor had previously announced that the Terra Nova project, which came on line in 2002, aims to prolong the life of the FPSO by about a decade to 2031 and produce an additional 80 million barrels.

Earlier this year, Murphy said Terra Nova was forecast to remain down throughout this year to address safety equipment updates and complete dry dock work to be carried out in Navantia’s yard in Ferrol, Spain. The work was scheduled to start in the spring of this year and take about four months.

However, the company announced in March that it was evaluating alternate options for the work as the planned drydock in Spain was no longer available due to that country’s Covid-19 response.

Despencier said on Tuesday that Suncor has since been evaluating alternative scenarios for completion of Terra Nova critical maintenance work and asset life extension activities.

“At this time we do not have an approved alternative for the asset life extension project,” Despencier said.

“We are now working towards stopping operations offshore and safely preserving the FPSO quayside by this summer. A final decision from the Terra Nova joint venture partners to go quayside is expected in the coming weeks. The location and duration have not been determined at this time. Essential work on subsea assets, such as inspections, is expected to proceed once the installation has left the field.”

Despencier added that Suncor still sees Eastern Canada and Terra Nova continuing to play a long-term role in the company’s upstream exploration and production portfolio.

The Canada-Newfoundland and Labrador Offshore Petroleum Board regulator said its staff had engaged in discussions with Suncor and the Certifying Authority regarding the requirements for asset life extension for Terra Nova following the cancellation of the drydock plans.

“While we sympathise with the workforce affected by today’s announcement, we are not privy to the commercial considerations faced by Suncor and its partners,” a spokesperson said.

Source: Upstream | This text was excerpted from the media outlet cited on May 12, 2020 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.