Today, the Honourable Kathy Dunderdale, Premier of Newfoundland and Labrador, joined Husky Energy and its partners in Placentia to announce an agreement to advance the development of the White Rose Extension Project.
“This is an exciting day for us, and for an industry which has provided tremendous benefit to the people of our province,” said Premier Dunderdale. “Through development of the White Rose Extension Project, the province will gain an estimated $3 billion in royalties, return on investment through Nalcor Energy, and corporate income tax. By working together on agreements such as the one announced today, we are securing opportunities for a vibrant economy in this province that maximizes benefits for Newfoundlanders and Labradorians.”
Amendments to the benefits terms of the 2007 White Rose Expansion Project Framework Agreement will allow for the development of West White Rose using a wellhead platform, instead of the subsea development originally planned. The platform will have a stand-alone concrete gravity structure and topsides which will be tied-back to the existing SeaRose Floating Production and Storage Offloading (FPSO) vessel.
“Using a wellhead platform for this project signals an innovative way of developing smaller satellite developments in Newfoundland and Labrador,” said the Honourable Derrick Dalley, Minister of Natural Resources. “This option demonstrates prudent resource development by increasing recoverable oil and extending the field’s life.”
The wellhead platform will deliver an estimated 115 million barrels of oil. Full development of the White Rose main field and all satellite tie-backs together including the White Rose Extension, is estimated to generate over $7 billion in total to the province.
Employment benefits for Newfoundlanders and Labradorians will be significantly enhanced compared to the original subsea concept. A total of 12,000 person years, which includes approximately 250 new platform positions, will be created over the life of the project. The development phase of the project alone is expected to generate 2,800 person years in the province.
To enable construction of the concrete gravity structure, a graving dock complete with gates will be built in Argentia by the proponents. The construction of these gates represents a new, significant piece of infrastructure in the province and is reusable for future industrial work.
“Today’s announcement will see Argentia become an important new player in the Newfoundland and Labrador offshore oil industry,” said Felix Collins, MHA for Placentia-St. Mary’s. “This will result in continued opportunities for regional growth and development as well as spin-off benefits for residents and businesses in the area.”
The lease for the graving dock and gates will be between the operator and the Argentia Management Authority.
“The wellhead platform project and gated graving dock facility advances AMA’s vision for Argentia as this province’s premier heavy industrial seaport,” said Harvey Brenton, CEO, Argentia Management Authority. “It will generate economic activity for our region and our province for many years to come.”
The White Rose oilfield is located on the northeastern Grand Banks approximately 350 kilometres east of St. John’s. Husky Energy is the majority owner and operator of the White Rose oilfield and its satellite expansions.
“This agreement is an important step in our approval process, and allows us to advance plans for a wellhead platform,” said Malcolm Maclean, Husky’s Vice President, Atlantic Region. “The Atlantic Region is an important growth pillar for Husky and our continued investment, both through exploration drilling and development of projects such as this, underscores our commitment to being here for the long term. A final investment decision will be contingent on appropriate regulatory, corporate and partner approvals.”
The White Rose Extension Project is a joint venture between Husky Energy, Suncor Energy, and Nalcor Energy.
“Several development options were carefully evaluated,” said Sandy Martin, Vice President, East Coast for Suncor Energy. “In the end we collectively aligned on the wellhead platform as the preferred development option. This option maximizes the benefits for all parties including the province and the project proponents. I want to commend everyone involved in getting us to this important milestone.
The Government of Newfoundland and Labrador, through Nalcor Energy, has a five per cent equity stake in the White Rose Expansion Project.
“We are very pleased to see continued reserve growth in our first offshore investment,” said Ed Martin, Nalcor Energy’s President and CEO. “This wellhead platform will allow us to drill new areas of the White Rose field and extend field life thereby opening further possibilities for value creation. Nalcor’s partnership in White Rose is a key revenue generator in our project portfolio.”
The offshore petroleum industry is the largest contributor to the provincial GDP at 33 per cent with an oil production value of over $8 billion and royalty revenues of $2 billion in 2012.
Highlights to amendments regarding the benefits terms of the 2007 White Rose Expansion Project Framework Agreement include:
- The wellhead platform will deliver an estimated 115 million barrels of oil. Based on the latest PIRA crude oil price outlook, development of the White Rose Extension Project is estimated to return $3 billion in royalties, return on investment through Nalcor Energy, and corporate income tax to the province.
- Employment benefits for Newfoundlanders and Labradorians will be significantly enhanced compared to the original subsea concept. A total of 12,000 person years which includes approximately 250 new platform positions will be created over the life of the project. The development phase of the project is expected to generate 2,800 person years in the province.
- Work in the province includes project and procurement management; engineering and construction of the graving dock complete with gates, the concrete gravity structure and accommodations modules; and the fabrication of the flare boom, heli-deck, and lifeboat stations.
- To enable construction of the concrete gravity structure, a graving dock complete with gates will be built in Argentia by the proponents. The construction of these gates represents a new, significant piece of infrastructure in the province and is reusable for future industrial work.
- The proponents will work in collaboration with the Provincial Government, education and training institutions, unions and project contractors to identify skilled trade shortages relative to the project and to work to develop and implement training and apprenticeship programs.
- The proponents will implement the approved diversity plan including the development of proactive measures to support the increased participation of underrepresented groups, such as women, Aboriginal persons, persons with disabilities and visible minorities, in the development and operational phases of the project.
Press Release, October 11, 2013