Page 4 - NorthAmOil Week 24 2021

NorthAmOil COMMENTARY NorthAmOil

Suncor offers lifeline to Terra Nova

Canada’s Suncor Energy has tentatively agreed to increase its stake in the Terra Nova

project offshore Newfoundland and Labrador, offering a lifeline to an oilfield whose future

was in doubt

NEWFOUNDLAND CANADA’S Suncor Energy announced this Ongoing effort
AND LABRADOR week that a tentative agreement had been Terra Nova, located around 350 km offshore
reached to restructure the ownership of the Newfoundland and Labrador, entered service
Terra Nova oil project offshore Newfoundland in 2002 using the Terra Nova floating, produc-
WHAT: and Labrador and provide short-term funding tion storage and offloading (FPSO) vessel. It was
Suncor has tentatively towards a life extension plan for the oilfield. the first development in North America to use
agreed to take a larger The announcement came on June 16, a day FPSO technology in a harsh weather environ-
stake in Terra Nova and after the deadline for a decision on the future of ment, given that the area is prone to sea ice and
extend the project’s life. Terra Nova, which is estimated to need around icebergs. It is also one of the largest FPSO vessels
CAD600mn ($485mn) to extend its life. A few ever built, at 292.2 metres long and 45.5 metres
WHY: days earlier, the provincial government of New- wide, according to Suncor’s website. The facility
The company has been foundland and Labrador had rejected a request has the capacity to store 960,000 barrels of oil.
seeking provincial from the project partners to buy an equity stake The Asset Life Extension Project is antici-
government support to in Terra Nova. pated to help produce roughly 80mn additional
help extend Terra Nova’s While the newly announced agreement in barrels of oil over 10 more years of operations,
life and said that further principle, which will see Suncor raise its stake and was initially set to kick off in 2020. But even
work was contingent in the project from 38% to 48%, is not a guar- though the FPSO was removed from the field
on royalty and financial antee that Terra Nova will survive, it does offer in 2019 for planned upgrades amid safety con-
support. some assurance that the company is searching cerns, the project was delayed by the coronavi-
for a way forward. Suncor said this week that rus (COVID-19) pandemic.
WHAT NEXT: continued work on the project was contingent Currently, Suncor operates Terra Nova with a
A sanction decision on “royalty and financial support” from the pro- 37.675% stake, ExxonMobil holds 19%, Equinor
on the life extension vincial government. owns 15%, Cenovus Energy has a 13% interest,
programme at Terra A final decision on whether to sanction the Murphy Oil owns 10.475%, Mosbacher Energy
Nova is expected in the Terra Nova Asset Life Extension Project is antic- has 3.85% and Chevron holds 1%. Suncor has
autumn. ipated in the autumn, and further details will not yet specified how other partners’ interests
be announced when agreements are finalised, will change as it raises its own stake to 48%, but it
according to Suncor. did say that “a subset” of the project participants

Source: The Canadian
Press

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