Husky Energy will defer the final investment decision on its offshore West White Rose oilfield extension project for a year, and will also consider other options to a fixed platform, the company said on Wednesday.

First production for West White Rose was originally anticipated for 2017, but a company spokesman in Calgary said that may be delayed by three years as part of a strategy to "pace" longer-term projects.

The field, situated offshore in Atlantic Canada, has proved probable and possible reserves of 81.2 million barrels.

"We're going to take some time to identify further cost efficiencies with a proposed fixed platform and also to evaluate alternative options including a sub-sea development concept," Husky chief operating officer Rob Peabody said on a conference call after announcing the company's 2015 budget.

Husky also said it expects first oil from its South White Rose extension production well about the middle of 2015, later than originally planned, due to rig availability.

Peabody stressed that Husky is committed to "move forward" in the Atlantic region with a series of mid- and long-term projects.

"As we mentioned, we're taking the prudent approach to prioritizing our capital in favour of quick return projects and pacing our longer term projects," he stated.

"We deferred the final investment decision on West White Rose, although we absolutely remain committed to the development of that resource, you know, over the longer haul.

"We're going to use that pause just to identify cost efficiences within the current development concept as well as review alternative concepts including sub-sea. The project remains an important part of our long-term Atlantic region portfolio."

Oil hitting five-year lows

The announcement comes as world oil prices continue to plummet, hitting five-year lows in recent days.

And it comes one day after the provincial government announced that the projected deficit for 2014-15 has now surpassed $900 million.

'We're going to take some time to identify further cost efficiencies with a proposed fixed platform and also to evaluate alternative options including a sub-sea development concept.' - Rob Peabody

The White Rose field uses a floating, production, storage and offloading vessel called SeaRose.

Husky had planned to develop the West White Rose expansion using a wellhead platform tied back to the SeaRose.

The wellhead option consists of a concrete gravity structure (CGS) with topsides, including drilling facilities, wellheads and support services, such as accommodations for up to 144 people, utilities, flare boom and a helideck.

Plans call for the concrete structure to constructed in a purpose-built graving dock at the Argentia site in Placentia.

The Newfoundland and Labrador government and Husky signed an extension agreement one year ago during a ceremony in Placentia.

Harvey Brenton of the Argentia Management Authority (AMA) said news of the delay is disappointing, but he remains confident the project will go ahead.

Brenton said roughly 100 people were employed at the site up until recently, doing preparatory work for the graving dock.

He said that work will be completed in March.

The AMA had hoped that work would have ramped up at the site this spring, but that now seems unlikely.

The expansion is expected to deliver an estimated 115 million barrels of oil, and more than $3 billion to the province in the form of royalties, equity and corporate incomes taxes.

Husky has estimated the expansion will create 250 news jobs once it is up and running, and the workforce in Argentia could hit 500 at peak construction.

With files from Reuters