Green light given for White Rose oil expansion

The Newfoundland and Labrador government has given its blessing to Husky Oil's bid to expand the White Rose offshore oil field.

Husky, the majority owner of the field, intends to produce about 24 million barrels of oil at the nearby South White Rose Extension.

That represents less than 10 per cent of the size of White Rose, which has provable reserves approaching 250 million barrels oil.

However, the approval sets the scene for what could be significantly more activity around White Rose in the years to come.

The expansion "may eventually include undeveloped areas known as North Amethyst and West White Rose for which approval has not yet been sought from the province," Natural Resources Minister Kathy Dunderdale said in a statement.

Husky applied for the South White Rose expansion last year. At the time, the company pledged to spend almost $600 million in capital costs on the project.

The expansion may also prove to be a boon for the Marystown shipyard. Husky has said it may send an offshore production vessel there for upgrading to handle extra oil production.

Meanwhile, Dunderdale said the province is talking with Husky about financial and other benefits that may accrue from the expansion.

In April, Husky received approval to increase annual production from 36.5 million barrels per year to 50 million barrels per year at White Rose, which in November 2005 became the third field to go into production on the Grand Banks.

Before the expansion was granted, White Rose had an estimated production life of between 10 and 15 years.