Cenovus Energy and its partners are moving forward with the West White Rose oil project, a $ 3.2 billion expansion of the White Rose oil field offshore Newfoundland, and the agreement includes changes in how much money they will have to pay. pay the companies to the provincial government. .
In separate press releases issued Tuesday morning, both Cenovus and Suncor, another project partner, said the agreement with the province includes a modified gift structure that “safeguards the project’s economy in periods of low prices.” of the goods “.
In its own press release, the province said its “copyright share is improving in an environment of higher commodity prices.”
The West White Rose project was suspended in March 2020, as the COVID-19 pandemic consolidated, causing the oil markets to fall as travel and other economic sectors stalled.
In December of that year, the Newfoundland and Labrador government donated $ 41.5 million from the Federal Oil and Gas Recovery Fund to Husky Energy to keep 331 jobs in the project idle over time. .
But the project continued to face an uncertain future until Tuesday’s announcement.
“The owners of the joint venture have worked together to significantly reduce the risk of this project over the past 16 months. As a result, we are confident that the restart of West White Rose offers a higher value to our shareholders than ‘option of abandonment and dismantling,’ he said. the president and CEO of the company, Alex Pourbaix, in the statement.
Cenovus acquired its stake in the project after buying Husky Energy in late 2020 and said it is now reducing its work interest in both the White Rose field and the extension, to 60% in the original field and in the 56% in West. Rosa Blanca.
Suncor said in exchange for a $ 50 million payment from Cenovus, it will increase its stake in the oil field to 40% and 38% in the extension.
This is a representation of the West White Rose extension project. (Energy Husky)
The expansion is a massive gravity concrete structure, which will rise to a height of 145 meters from the base to the top once completed. Cenovus said it expects the platform’s first oil to arrive in the first half of 2026, with a maximum production of about 80,000 barrels a day by the end of 2029.
The project is expected to extend the life of the oil field by 14 years and give Cenovus access to an additional 200 million barrels of oil.
The province said that in addition to the changes in the royalty structure, it will receive a $ 200 million and $ 100 million gift abandonment credit to establish a green transition fund.
The statement said the government expects the project to create about 250 permanent jobs on the platform and 1,500 more jobs.
“Employment will start rising immediately in place of Argentina and will increase until 2023,” the government statement said.
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