Page 5 - NorthAmOil Week 36 2021
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NorthAmOil                                   COMMENTARY                                          NorthAmOil


                                                                                                  Construction on
                                                                                                  infrastructure for West
                                                                                                  White Rose was about
                                                                                                  60% complete when it
                                                                                                  stalled.
























                         been crucial to helping us reach this important   The news was welcomed by the Newfound-
                         milestone.”                          land and Labrador Oil and Gas Industries Asso-
                           Indeed, Suncor noted that the agreement to  ciation (Noia).
                         restructure the project and move forward with   “I am far more optimistic about the future of
                         the Asset Life Extension included previously  the West White Rose project today than I was
                         disclosed royalty and financial support from the  a few weeks ago,” Noia’s CEO, Charlene John-
                         government of Newfoundland and Labrador.  son, said. “While much is left to do before work
                         This amounts to up to CAD205mn ($163mn),  restarts on the concrete gravity structure [CGS],
                         on a matching contribution basis.    we have a reason to look to the future and be
                           The company’s 2021 guidance has not  ready to participate in the completion of that
                         changed, it said.                    facility and its operation offshore.”
                                                               Husky previously said that West White Rose
                         West White Rose hopes                would produce more than 180mn barrels of oil
                         In its other announcement, Suncor said it had  over its 25-year lifespan. Work on the CGS and
                         agreed to raise its interest in the White Rose  other infrastructure for the project was around
                         field from 27.5% currently to around 40%, in  60% complete when the project was stalled.
                         exchange for a cash payment from Cenovus. This
                         is conditional on the partners deciding to restart  What next?
                         work on the West White Rose expansion project,  While uncertainty over the fate of West White
                         after it stalled last year amid the first wave of the  Rose remains, the announcement represents
                         coronavirus (COVID-19) pandemic.     a step forward for the project, illustrating a
                           The uncertainty over the future of West  commitment by Suncor in particular to raising
                         White Rose was further compounded by a  its interests in assets with future production   It is not out of
                         change in ownership, when previous majority  potential.
                         owner Husky Energy was acquired by Ceno-  The comments from Johnson, too, suggest   the question
                         vus in a deal that closed at the start of 2021.  that optimism over West White Rose’s restart is   that greenfield
                         Initially, Cenovus put its offshore plans on  growing.
                         hold, citing a challenging price environment   Both White Rose and Terra Nova are mature   developments
                         and saying it would take the whole of 2021 – at  fields where output can be boosted. But if oper-
                         least – to assess the viability of its operations  ators are showing an interest in returning to   could follow.
                         in the region.                       Eastern Canada’s offshore, it is not out of the
                           Oil prices continued to strengthen after this  question that greenfield developments could
                         announcement was made, though they have  follow.
                         since dipped below highs seen in July. None-  In particular, Equinor continues to talk up
                         theless, stronger prices could well be contribut-  the potential of its Bay du Nord discovery in
                         ing to a revival of interest in pursuing offshore  the Flemish Pass Basin and highlighted it as
                         development.                         being among the company’s key projects that
                           Suncor said that Cenovus would complete  represent significant investment opportunities
                         an evaluation on the restart of work on West  in an investor presentation in June. Executives
                         White Rose by mid-2022. No significant capital  said at the time that a final investment deci-
                         spending would be expected before 2023 and  sion (FID) was still some way away, but further
                         both companies will work together to increase  exploration is planned for the region, and any
                         the efficiency of the West White Rose asset, Sun-  further discoveries could accelerate the pro-
                         cor added.                           ject’s sanctioning.™



       Week 36   09•September•2021              www. NEWSBASE .com                                              P5
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