Nfld. & Labrador

Offshore regulator 'closely' monitoring oil companies over hiring practices

The body that regulates Newfoundland and Labrador's offshore oil and gas industry says it is closely monitoring companies to ensure they are complying with local benefits plans, including hiring.

West Aquarius, West Hercules both operating with a majority of local residents

The West Hercules is one of two sixth generation ultra-deepwater drilling rigs operating in offshore Newfoundland. (Statoil/Canadian Press)

With more jobs in the oil industry disappearing, companies that operate in Newfoundland and Labrador's offshore are facing increased scrutiny to ensure they are complying with local benefits plans, including hiring practices.

The organization that regulates the offshore, the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB), confirmed in a statement that it is "closely monitoring" the industry.

"We expect operators to meet their responsibilities and comply in all areas at all times," the statement read.

"We have regular discussions with those we regulate in that regard, and we're keeping on top of all industry activities and trends in all our areas of responsibility."

That's welcome news to those who have lost their jobs in recent months, several of whom have contacted CBC News to complain about what they say are large numbers of "foreigners" working in the offshore.

One out-of-work drill rig worker said the West Hercules, which is under contract to Statoil in the Flemish Pass Basin, is "filled with foreigners."

The worker, who asked not to be named, said it's unacceptable that so many qualified people from this province are unemployed, while so-called "ex-pats" are working on the rig.

But Statoil said it is fully complying with its benefits plan, and that 161 of the 251 crew on the Hercules are residents of Newfoundland and Labrador. That's nearly 65 per cent.

The offshore installation manager on the Hercules — the most senior position on the rig — is held by a resident of the province.

"Statoil works closely with regulating authorities to ensure the programs we operate are safe and compliant," the company stated in an email.

Seadrill says it is complying

A similar rig, the West Aquarius, is under contract to ExxonMobil and is drilling near the Hibernia platform.

Seadrill has confirmed that of the 170 crewmembers on board the Aquarius, 137 are from this province. That's just over 80 per cent.

"Seadrill is meeting the requirements of the benefits plan," the company said in a statement.

When the Aquarius arrived in Newfoundland waters in late 2012, its crew consisted of more than 100 expatriate personnel, the company added.

Companies bound by legislation

Legislation requires that operators give first consideration to Newfoundlanders and Labradorians when hiring in the offshore.

The board said it accepts that foreign residents may crew a vessel or installation when it is being brought to the province, but explained that companies are required to have a succession plan for work programs of a longer duration.

The increased scrutiny by the board comes as the offshore continues to be buffeted by low oil prices and a decline in the number of drill rigs active on Canada's east coast.

The Henry Goodrich and the GSF Grand Banks, two semi-submersible drill rigs with long histories in the region, recently departed the offshore after their contracts expired, taking hundreds of good-paying jobs in the process.

The industry was dealt another blow earlier this month when the purchase of the West Mira, a rig under construction in Korea, was cancelled by Seadrill at the 11th hour.

Many of those set to work on the Mira were from Newfoundland and Labrador.

The companies that operate the province's three producing oil fields and the contractors who support those operations have also cut jobs in a bid to reduce costs.

Exact numbers are not available, but insiders say many hundreds of jobs in the sector have disappeared locally in recent months.

ABOUT THE AUTHOR

Terry Roberts is a journalist with CBC's bureau in St. John's.

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