Nfld. & Labrador

Suncor cites cost as key to producing more Terra Nova oil

Suncor Energy believes there is more oil at Terra Nova than first thought, but says economics will dictate whether it will be produced.

VP Brent Janke says 'laser-like focus' necessary to extend life of field offshore Newfoundland

Suncor VP Brent Janke speaks to NOIA about the key to extending the life of Terra Nova oilfield 1:23

Suncor Energy believes there is more oil at Terra Nova than first thought, but says economics will dictate whether it will be produced.

"Cost control was always necessary, even in a high oil-price environment, but the need is more acute than ever in light of the current business environment," Brent Janke, Suncor's East Coast vice-president, said in a speech to delegates at the NOIA conference in St. John's.

"We do need to have a laser-like focus on cost, specifically on reducing costs, for today and tomorrow, if we want to see fields like Terra Nova extended, or new fields brought into production."

We do need to have a laser-like focus on cost, specifically on reducing costs, for today and tomorrow, if we want to see fields like Terra Nova extended, or new fields brought into production.-  Brent Janke, East Coast vice-president, Suncor

The original estimate when Terra Nova was sanctioned came in at 370 million barrels.

Suncor hit that milestone this Februrary, Janke said, shortly after the 13th anniversary of first oil at the project.

In 2013, the Canada-Newfoundland and Labrador Petroleum Board revised its estimates for proven and probable oil reserves at Terra Nova up to 506 million barrels. 

Janke referenced that C-NLOPB forecast in his address Thursday.

"Having already exceeded the original sanction estimate, it will not be surprising to know that we believe that there is even more in the field than originally thought," Janke said.

The Terra Nova platform heads along the Newfoundland coast in this 2001 file photo. (Andrew Vaughan/Canadian Press)
Janke did not discuss Suncor's own current Terra Nova estimates in his speech to NOIA.

He was not available to answer questions from reporters.

In prior public benefits reports posted on the Suncor website, the company estimated Terra Nova's life-of-field production at approximately 516 million barrels.

Janke's comments Thursday echoed those he made in a speech to the same conference last year.

He warned last year that costs will be a "key consideration" in decisions about future development in the Newfoundland offshore.

"Rising development costs may negatively impact ultimate development potential and benefits to the province," Janke told delegates in June 2014.

He said at the time that producing companies, the supply industry and government must work together to find a "made in Newfoundland and Labrador solution" for Suncor's aspirations in the province to grow.

On Thursday, Janke stressed that Suncor remains serious about exploration on the East Coast, and committed to the region.

He cited the recent record bid for exploration rights in the Newfoundland offshore oil industry.

Suncor is one of three members of a partnership — along with ExxonMobil Canada, and ConocoPhillips Canada Resources — paying $559 million for the rights to a 266,139-hectare parcel in the Flemish Pass.

Suncor holds 37.675% share of Terra Nova

The Terra Nova field is located about 350 kilometres southeast of St. John's.

Suncor is the operator, holding a 37.675 per cent share of the project.

Janke told NOIA delegates that Terra Nova is currently in the middle of a scheduled 10-week maintenance shutdown.

Recent production at the project has been strong, he noted, peaking at more than 92,000 barrels a day on one date in November — a four-and-a-half year high.

Suncor has not been immune to cost cutting in the industry in the wake of the recent oil price crash.

In January, the Calgary-based firm announced it would cut around 1,000 jobs company-wide and implement an overall hiring freeze for "non-critical" roles.

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