Page 5 - NorthAmOil Week 36 2021

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