Husky Energy to get $41.5 million in federal cash for stalled N.L. offshore project

Husky Energy to get $41.5 million in federal cash for stalled N.L. offshore project
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ST. JOHN’S, N.L. — Husky Energy will receive $41.5 million in federal money to maintain jobs and move toward restarting its West White Rose offshore oil project in Newfoundland and Labrador, although officials admit a restart is not certain.

Newfoundland and Labrador Premier Andrew Furey made the funding announcement Thursday at Husky’s offices in downtown St. John’s. Furey said the investment ensures jobs for more than 300 people in the province for the next year.

“The project will provide employment for 169 people in this province in project management and engineering alone,” Furey told reporters. He said there will also be work for 162 tradespeople in Argentia and Marystown, for a total to 331 jobs.

The funding doesn’t come with a guarantee that Husky will restart its $2.2-billion West White Rose project, which would extend the life of its White Rose oilfield about 350 kilometres off the coast of St. John’s. A press release following Furey’s announcement stresses the money will “protect the option of restarting the West White Rose Project in 2022, if conditions permit.”

Husky Energy announced in September it was halting construction on the project, which was largely being carried out in Marystown, on Newfoundland’s Burin Peninsula, and Argentia, on the Avalon Peninsula. The project is roughly 60 per cent complete, and construction employed about 1,000 people in those two towns, according to a company press release.

In October, Husky announced it was suspending construction for all of 2021 as the company reviewed it operations in the province. “The (West White Rose) project is key to extending the life of the White Rose field. As we have said before, all options are on the table and accelerating abandonment remains a possibility,” Husky spokesperson Kim Guttormson said in an email at the time.

In September, the federal government announced it would provide $320 million, to be managed by the province, to help Newfoundland and Labrador’s offshore oil industry as the sector sputtered under plummeting oil prices and a global pandemic. In response, Furey assembled an oil and gas recovery task force whose goal was, in part, to decide how to parcel out that money.

“Its recommendations will help establish key priorities to maximize employment for Newfoundlanders and Labradorians, and support the recovery of our province’s oil and gas industry during this troubled time,” Furey told reporters Thursday.

The team has divided the federal cash into two streams, he said, with $288 million earmarked for offshore oil operators, and $32 million allotted to the service and supply sector.

Newfoundland and Labrador has four offshore oil installations, and Furey said his government has received funding requests from the companies behind all of them. “Further projects are expected to be announced in the coming weeks,” he said.

This report by The Canadian Press was first published Dec. 3, 2020.

Sarah Smellie, The Canadian Press

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