Nfld. & Labrador

Union blasts West White Rose layoffs following injection of public money

Dozens of workers at the West White Rose construction site in Argentia received layoff notices on Friday, a day after millions in public money was announced for the stalled offshore oil project.

Jobs losses hit Argentia, while workforce grows in Marystown

Husky's massive concrete gravity structure for the West White Rose extension project is 55 per cent complete, and is being built in a specially built graving dock at the Port of Argentia. This photo was taken in December. (Husky Energy)

Dozens of workers at the troubled West White Rose construction site in Argentia received layoffs notices on Friday, a day after millions in public money was announced for the stalled offshore oil project.

Meanwhile, the opposite situation is unfolding at a related construction site in Marystown, with the workforce growing  steadily in recent weeks as activity resumes on some topside components for the project.

The labour group Trades NL says 15 unionized workers at Argentia received layoffs notices Friday, meaning there will be fewer than 10 trades workers at the site as of Jan. 1.

Back in March, the association said the workforce peaked at 2,700.

Trades NL said the project management team was also slashed by 60 positions, or roughly two-thirds of its complement.

"To us it just does not add up. An $80-million announcement one day and 75 layoffs the next just does not make any sense to us whatsoever," said Darin King, executive director with Trades NL.

The layoffs came a day after the provincial government announced that Husky Energy — the lead partner in the West White Rose project — would receive $41.5 million from the government's offshore oil and gas recovery fund.

Husky and its partners promised to invest an equal amount of money.

Activity has been ramping up in recent weeks at the Kiewit-owned Cow Head fabrication facility in Marystown. As of Monday, some 100 trades workers are back on the job, and nearly three dozen more are expected to be called back soon, according to sources. Several components for the stalled West White Rose offshore oil project are being built at the facility.

The $320-million fund was created with federal money to help protect offshore oil jobs and lower carbon emissions amid a global pandemic that has been battering the industry since earlier this year.

The money for Husky is to be used to create jobs and prepare the massive West White Rose project for full resumption of construction, possibly in 2022.

Marystown to get most jobs

In announcing the money, Premier Andrew Furey said the work related to the project will happen in 2021 and will mean 331 jobs. Specifically, he said, there will be 169 positions in project management and engineering, and 162 tradespersons at the Port of Argentia and a fabrication facility in Marystown.

But it now appears the bulk of those trades jobs, or more than 130 of them, will be in Marystown.

King said he's happy for the workers in Marystown, but expected more from Argentia.

"We understand there were not going to be 2,700 people back out there. But for the life of me I can't understand how there couldn't be 50 or 100 people in Argentia … to do some small scopes of work."

Union workers at Argentia are represented by Trades NL, which is an umbrella group from 16 building and construction unions.

Union workers at Marystown are represented by Unifor. Local 20 president Rick Farrell told CBC News he's not ready to speak publicly.

Meanwhile, Husky said the layoffs are part of a controlled reduction in employees because certain work has been completed.

The company issued a statement Monday afternoon, saying the layoffs are "part of the changing labour needs of the project based on its cycle. We announced in October that we were continuing suspension of major construction at sites such as Argentia for another year. We have been completing a controlled ramp down of the site; that work is now substantially complete. We will continue to maintain crews for maintenance and preservation scopes until a decision is made on resuming construction."

Andrew Parsons is Newfoundland and Labrador's minister of Industry, Energy and Technology. (Patrick Butler/Radio-Canada)

Husky said the demand for skilled trades workers will vary next year, depending on the scope of work, but stressed that all the money announced last week "will be spent in the province of Newfoundland and Labrador."

Energy Minister Andrew Parsons, in a statement, said he also became aware of the Argentia layoffs on Friday.

"I have also been told by Husky that workers at the Argentia site would be aware of the planned completion of the work schedule. However, I recognize that any layoff is challenging and I empathize with these workers and their families," Parsons stated.

The minister said Husky's proposal does not include new construction on the concrete gravity structure at Argentia.

And without the joint investment, Parsons said, construction activities would have been suspended at both Argentia and Marystown.

What's more, Parsons said the province will only release money to Husky for expenses deemed eligible under a pre-determined criteria.

Project 60% complete

West White Rose is a fixed wellhead oil platform that will allow Husky and its partners to produce another 180 million barrels of oil from the existing White Rose field, about 350 kilometres off the coast of Newfoundland.

But construction was halted this spring because of the pandemic, and Husky later said it was reviewing the project and its entire operations in eastern Canada.

This is a rendering of the West White Rose extension project. The earliest construction on the project may resume is 2022, though there are no guarantees. (Husky Energy)

The project's future became even more uncertain in October when rival Cenovus announced it would be acquiring Husky, with the deal expected to close early next year.

The project was roughly 60 per cent complete, with the concrete gravity structure being built in Argentia, and living quarters and other modules being built in Marystown. According to Husky, the work was supporting some 1,000 construction jobs at the two sites.

The main topsides are being constructed in Texas.

Trades NL is worried the public money is being used to subsidize oil and gas companies.

"We're just concerned Husky might be using this as away to keep some of their own internal jobs and ongoing operations going and here we are with 2,700 tradesworkers who have not worked since last March," said King.

He added: "Skilled trade workers will not sit around for two years without a job, so this announcement is very disappointing for our membership, and will have a detrimental impact on our retention of trades workers in the province."

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