Departure of GSF Grand Banks drill rig a 'temporary gap' in offshore
Job losses will be offset by pending arrival of West Mira, and eventual production at Hebron, says Noia CEO
The most prolific drill rig in the history of oil exploration off Newfoundland's east coast, the GSF Grand Banks, is demobilizing and will soon be towed to Scotland, displacing some 200 workers.
However, industry officials says those job losses are temporary with the sixth generation rig West Mira scheduled to arrive in 2016, and oil production in the Hebron field set to begin in 2017.
"We've got kind of a little bit of a temporary gap between the departure of the GSF Grand Banks and the arrival of the West Mira, and the opportunities that will come with Hebron," said Bob Cadigan, president and CEO of NOIA, the Newfoundland and Labrador oil and gas industries association.
There's also optimism that a massive sale of land rights in November will open the door to more exploration, and the deployment of even more rigs to the offshore.
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The GSF Grand Banks has been drilling in Newfoundland's offshore since 1998, but the rig is showing its age in an era of intense competition, low oil prices and a new generation of semi-submersibles.
The rig, which was built at the Saint John shipyard in the mid-1980s, has been under contract to Husky Energy.
An official with Husky confirmed Thursday that the contract ends on Sept. 19, and the rig will be towed to Scotland and transferred back to its owner, Transocean.
It's likely the platform will be "cold-stacked" alongside another iconic rig in Newfoundland's offshore, the Henry Goodrich, which is also owned by Transocean.
But sources say the company has no immediate plans to scrap the rig.
Seadrill a leading player
Company officials would not confirm the number of jobs losses, but sources say the number is roughly 200 or two crews of 100.
"A lot of folks have worked on it and I'm sure there's a lot of nostalgia for the rig," said Cadigan.
"The unfortunate part with a contract like this concluding is obviously the jobs with the rig disappear temporarily."
There are more opportunities, however.
Construction on the West Mira is in the final stages in Korea, and the rig is scheduled to begin drilling on the east coast next year.
The owner, Seadrill, has signed a nearly $1.2 billion lease with Husky, which is scheduled to begin in February and conclude in 2021.
In a statement to CBC News, Seadrill said it is recruiting for the Mira, which will have a complement of roughly 160.
Seadrill has two other fifth generation rigs under contract off Newfoundland. They include the West Hercules and the West Aquarius, both of which have crews of 160.
There will also be hundreds of new jobs created when the Hebron gravity based structure, currently under construction at Bull Arm and other sites, begins production in about two years, said Cadigan.
He said the departure of the GSF Grand Banks is symbolic of a shift in offshore exploration.
"We're seeing a lot of these older rigs being cold-stacked and there are a lot of newer, more efficient rigs available for lease, and I think that's why we're seeing it sail off," he said.