No decision made on Terra Nova oilfield shutdown: Suncor
Premier Dwight Ball says 'offshore industry has undergone tremendous challenges'
Amid reports Suncor is shutting down Terra Nova production until 2022, a company spokesperson said no such decision has been made.
Premier Dwight Ball says the oilfield has been "extremely important" for Newfoundland and Labrador.
Ball was responding to a question from the business news website All Newfoundland and Labrador, which broke the news, at the province's COVID-19 news conference Tuesday afternoon.
"We're working very closely with Terra Nova. I just had a conversation with our minister, just prior to coming to this media availability today. It's recent news," Ball told reporters.
"The offshore industry has undergone tremendous challenges, within the past few months, in terms of the price of oil, and, of course, with Terra Nova they've had some other challenges as well."
The company decided not to proceed to dry dock in 2020 over COVID-19 concerns, and since then, Suncor has been "evaluating alternative scenarios" to complete critical maintenance work at Terra Nova.
"At this time we do not have an approved alternative for the asset life extension project," the statement reads.
The Canada-Newfoundland and Labrador Offshore Petroleum Board, which regulates the industry, said it has been in talks with Suncor about the requirements for plans to extend the life of Terra Nova.
The board said it sympathizes with the workforce affected by the announcement, but isn't privy to the commercial considerations faced by Suncor and its partners.
Federal Natural Resources Minister Seamus O'Regan was not available for interviews, but tweeted that officials will work with the company to minimize impacts on the workers and their families.
We’ve been talking to the company throughout the day.<br><br>And we will work with them to minimize impacts on the workers and their families. <a href="https://t.co/HLn6M86bWh">https://t.co/HLn6M86bWh</a>
—@SeamusOReganIt was not immediately clear Tuesday how many workers could be affected, or what those impacts might be.
In a 2018 industrial benefits report, Suncor indicated that 1,032 people were working to support the Terra Nova development, about six in 10 of them offshore. Residents of Newfoundland and Labrador accounted for 88 per cent of the total number of workers.
Months offline already
Production has been shut down at Terra Nova since December.
At the time, the C-NLOPB said Suncor was "not compliant with regulatory requirements … to maintain and comprehensively inspect equipment critical in the safe operation of the installation, to ensure repairs are carried out in a timely manner, and to ensure that mitigation measures are effective in minimizing hazards."
Specifically, the regulator's chief safety officer found insufficient availability of redundant fire water pump systems onboard the installation.
In April, the board told CBC News that the water pump issue had since been corrected, but the production suspension order remained in effect "while Suncor carries out other maintenance work and implements corrective actions with respect to their maintenance management system."
To make matters worse, a planned overhaul of the Terra Nova floating platform at a Spanish shipyard was shelved because of the COVID-19 pandemic.
"We are now working towards stopping operations offshore and safely preserving the floating, production storage and offloading (FPSO) vessel 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," Tuesday's statement said.
A year ago, Suncor and its partners sanctioned plans to proceed with a project that will extend the life of the Terra Nova FPSO vessel for a decade, to 2031.
The aim was to capture roughly 80 million additional barrels of oil.
The future of the project now appears to be in limbo, but Suncor's statement says Terra Nova willl continue to play "an important long-term role" in its exploration and production operations.
"Successful completion of the asset life extension would extend the facility by 10 years, capture approximately 80 million additional barrels of resource and provide various benefits to the province in the form of taxes, royalties and employment," says the statement.