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Today’s Date

Wednesday, Jun 23rd, 2021

Public Opinion Poll Shows Continued Strong Support for Offshore Oil & Gas Industry & Terra Nova Project

(St. John’s, NL – June 8, 2021) Noia recently engaged a public opinion firm to survey Newfoundlanders and Labradorians about their support for the offshore oil and gas industry, and the Terra Nova Project specifically. Not surprisingly to Noia, the vast majority of respondents support the industry and efforts to ensure the Terra Nova Project undergoes the Asset Life Extension project and continues to operate offshore, even if that requires the Government of Newfoundland and Labrador purchasing an equity stake.

When asked if they support offshore oil and gas development in Newfoundland and Labrador 83% of respondents indicated they either completely or mostly support the industry. When it came to the Terra Nova Project, 88% agreed that it has a significant impact on the provincial economy and 71% supported the Government of Newfoundland and Labrador purchasing an equity stake to ensure 10 more years of operation through the Asset Life Extension project. Just 15% of respondents opposed an equity stake in this project and 14% did not know.

“The offshore oil and gas industry continues to receive broad support across Newfoundland and Labrador and I believe this can be attributed to the value it provides our province and country in tangible terms of well-paying jobs, royalties and benefits to help pay for public services, and the impact it has upon our communities and the social sector. I was pleased to see that those who responded also support the continuation of the Terra Nova Project, including the province taking an equity stake. This is too important of a project to see end and move to decommissioning, and the people of Newfoundland and Labrador recognize that.”
• Charlene Johnson, Noia CEO

On January 14, 2021, the Government of Newfoundland and Labrador announced a non-binding Memorandum of Understanding had been reached with the project owners. The province also committed up to $175 million on a matching contribution basis and possibly modifying the royalty regime should an agreement be reached. This commitment was based on an agreement for long-term production via the Terra Nova Project. The CEO of Suncor Energy recently stated a decision on the project – to continue with the asset life extension project or move to abandonment – would be made by June 15, 2021.

“For decades now we have seen the benefits the offshore oil and gas industry can provide Newfoundland and Labrador. Clearly, the people of the province support the industry and efforts to enhance its contribution to our province. We need to grow this industry in order to prosper from our natural resources and use them to lead the way in the energy evolution. Now is our time to be leaders.”
• Charlene Johnson, Noia CEO

The public opinion poll was conducted by MQO Research from June 4 to June 7 and has a margin of error of +/- 4.9 percentage points.

The Newfoundland and Labrador Oil and Gas Industries Association (Noia) was founded in 1977 to represent the supply and service sector of the offshore oil and gas industry. Today, Noia represents approximately 460 member organizations worldwide which are involved in, or benefit from, the oil and gas industry of Newfoundland and Labrador. Noia members are a diverse representation of businesses that range from offshore supply boats and helicopters, health and safety equipment and training, engineering solutions and fabricators to law firms and human resource agencies.

Noia Poll Questions click here.

Backgrounder

Terra Nova Project Facts*
Suncor Energy operates the Terra Nova field, which is located offshore approximately 350 kilometres southeast of Newfoundland and Labrador.

Discovered in 1984, the oil field was the second to be developed on the Grand Banks offshore Newfoundland. Production from the field began in 2002, using the Terra Nova Floating, Production Storage and Offloading (FPSO) vessel.

First development in North America to use FPSO technology in a harsh weather environment featuring sea ice and icebergs.

One of the largest FPSO vessels ever built, the Terra Nova is 292.2 metres long and 45.5 metres wide, approximately the size of three football fields laid end to end. From the keel to the helideck, it stands more than 18 stories high.

The Terra Nova FPSO can store 960,000 barrels of oil and accommodate up to 120 people while producing.

The Terra Nova FPSO was designed for the environment in which it operates. A double-hulled, ice-reinforced vessel, it has five thrusters (two forward and three aft) and a global dynamic positioning system, which is an automated system that allows the vessel to maintain its headings. The same system reduces the impact of waves by allowing the FPSO to change to more favourable headings in high winds and storms.

In May 2019, Suncor and the Terra Nova joint venture owners sanctioned plans to proceed with a project that will extend the life of the FPSO vessel to approximately 2031.

The asset life extension project is expected to allow the facility to capture approximately 80 million additional barrels of oil for the Terra Nova partnership. The asset life extension project was scheduled for 2020.

Terra Nova owners and their working interests
Suncor Energy 37.675% (operator)
ExxonMobil 19%
Equinor 15%
Husky Energy 13%
Murphy Oil 10.475%
Mosbacher Operating 3.85%
Chevron Canada 1%

 

* https://www.suncor.com/en-ca/about-us/exploration-and-production/east-coast-canada/terra-nova

Potential Industry Losses
Over the next 10 years, the estimated loss to Newfoundland and Labrador* due to deferment and loss of oil & gas exploration and development projects across the industry could be substantial:
• $11 billion in provincial revenues impacting programs, infrastructure, education, and health care throughout communities in Newfoundland and Labrador;
• ~$60 billion of total provincial GDP;
• 90,000 person-years of employment, resulting in significantly lower consumer spending in retail, restaurants, real estate, and other services.

*Source: Government of Newfoundland and Labrador