Excitement gushes with new Husky find in Newfoundland offshore
A policy analyst warns that high crude prices are a double-edged sword
As Brent crude hits its highest price per barrel in nearly four years, Husky Energy has announced another discovery in the White Rose field in the Newfoundland offshore.
The announced discovery is about 10 kilometres from the SeaRose oil platform, which has been producing in the Jeanne d'Arc basin for 13 years.
This latest discovery comes just one year after Husky announced a find in the same general area, and after the company sanctioned a new concrete gravity structure for the West White Rose project, which is being built at a cost of $2.2 billion.
"I think every time we make a discovery like this it just gives us more confidence about the area," said Trevor Pritchard, Husky's senior vice president for the Atlantic region.
The estimated amount of recoverable oil hasn't yet been determined, Pritchard said. Husky continues to drill further to determine the potential of the finds.
"It's been an exploration well, but it's now turned into a discovery, so it's very exciting for us," he said. "Early days yet to see how big this is, but for 85 metres of oil bearing sand it's starting to tune us up a little bit."
'The outlook for our future is bright'
News like the Husky discovery adds to an improving mood in the resource industry in Newfoundland and Labrador.
"It's absolutely fantastic. The outlook for our future is bright," said Charlene Johnson, CEO of the offshore petroleum association NOIA.
"I was just in Houston a couple of weeks ago at a major oil and gas technology conference. All eyes were on Newfoundland and Labrador and the potential that exists out here."
The provincial Liberal government is also speaking enthusiastically, with the natural resources minister saying she was very pleased to hear Husky's announcement.
"All of the stakeholders are really working together to really ramp up and move forward with the development of our offshore oil and gas," Siobhan Coady said.
"We are one of the best places for prospectivity in the world."
'It comes with a mixed blessing'
New developments in the resource sector aren't the only good news for the provincial government. When they released their budget last month they set an average price for Brent crude for the year at $63 a barrel — that price is now sitting at just under $80.
That could mean additional revenues for the province, but policy analyst Ed Hollett warns that we are still early into the fiscal year, and oil prices are volatile.
"It's good. It's great stuff. It's going to produce some more money for the province. More jobs. It will be fine," said Hollett, senior research fellow with the Atlantic Institute for Market Studies.
"But it comes with a mixed blessing."
Industry and government positivity aside, drivers in this province are still paying high prices at the pumps — and that financial hit could get even harder if crude prices continue to climb.
"You're going to see an increased cost for gasoline. You're going to see an increased cost for the clothes we have on our backs. It's going to produce all sorts of changes."
Hollett said oil revenues alone won't fix the province's fiscal issues, but they can have an effect, one way or another, on household finances — including paying high prices to fill up your vehicle.
"The difference is if you're making $200,000 a year and your spouse is making $200,000 a year it's a lot easier to do that than if you're living at the median household income in this province, which is somewhere around $70,000 to $80,000 before taxes."