Nfld. & Labrador

Terra Nova to sail for Spain as troubled project takes major step toward resuming production

An offshore oil project that teetered on the verge of collapse not long ago is about to take a major step towards resuming production when the Terra Nova floating production, storage and offloading vessel sets sail for a Spanish dockyard, likely this week.

Offshore union leader says workers encouraged and hopeful as aging vessel heads off for 7-month overhaul

The Terra Nova FPSO, pictured here moored dockside at the Bull Arm fabrication site in Trinity Bay, will set sail for a Spanish dockyard this week, where a major refit of the aging oil production vessel will take place. (Newfoundland Offshore/Facebook)

An offshore oil project that teetered on the verge of collapse not long ago is about to take a major step toward resuming production when the Terra Nova FPSO sets sail for a Spanish dockyard, likely this week.

"Jobs, happy families and a prosperous economy," was how union leader Dave Mercer described his view Tuesday as he stood in the shadow of the Terra Nova dockside in Bull Arm, Trinity Bay.

The lead oil company for the project, Calgary-based Suncor, said in a statement that work is continuing to prepare the aging vessel for a cross-Atlantic voyage to Spain.

The company would not give a timeline for a departure, but industry insiders say that weather permitting, it's likely the Terra Nova will slip her mooring lines Wednesday and carry out several days of sea trials.

If those sea trials are successful, it's expected the vessel will begin a 15-day voyage to Europe later this week.

After arriving in Spain, the Terra Nova will be placed in drydock, where a seven-month refit, referred to in the oil business as an asset life extension, will be completed.

According to Suncor, the work in Spain will include structural repairs to the hull, replacement of the waste heat recovery unit, fabric maintenance and overhaul of the swivel unit on the FPSO — for "floating production, storage and offloading" vessel.

The plan is for the Terra Nova to resume production in the Jeanne d'Arc Basin, 350 kilometres southeast of St. John's, before the end of 2022.

Dave Mercer, president of Unifor Local 2121, says workers linked to the Terra Nova oil field in Newfoundland's offshore are upbeat about a plan to return to the Terra Nova to the Grand Banks in late 2022. (John Pike/CBC)

Suncor estimates the Terra Nova will produce another 80 millions barrels of oil over 10 years.

"Everybody worked together and I think that we're on a hell of a lot more solid ground than we ever were. And I'm looking forward to seeing her coming back and going back into production," Mercer said.

It's the latest chapter in a wild saga for the project, which became Newfoundland and Labrador's second producing oil field when it began pumping oil in January 2002. Since then, it has produced 425 million barrels of crude, with more than 420 direct jobs linked to the project as of June 30.

But the Terra Nova has not produced a single barrel of oil since late 2019, when safety issues prompted the offshore regulator to suspend its production licence.

A plan to send the vessel to Spain last year for a refit was scuppered by the global pandemic, and that was followed by months of uncertainty about the overall fate of the project, with Suncor and its partners not ruling out abandonment and decommissioning.

A last-minute strategy to revive the project emerged in June after more than $200 million in cash from a federal oil industry recovery fund was offered to Suncor to help with refit costs, and the provincial government also agreed to forfeit as much as $300 million in future royalties.

The twists and turns also included a major shakeup in ownership, with some oil companies leaving the project, while the remainder, including Suncor, took a larger equity stake in the Terra Nova oil field.

Hundreds of workers have been hired in recent weeks to carry out work on the Terra Nova and make it seaworthy for the voyage to Spain, said Mercer.

"They're happy being able to execute the work that was done here, and done safely, I might add," said Mercer.

The number of jobs linked to the project are expected to dip as the vessel undergoes work in Spain, but Mercer said the short-term pain is better than the alternative, which was no work at all.

He said morale among the workforce is high once again, knowing that there's still at least a decade of oil production left in the Terra Nova.

"There is light at the end of the tunnel," said Mercer.

Read more from CBC Newfoundland and Labrador

ABOUT THE AUTHOR

Terry Roberts is a reporter with CBC Newfoundland and Labrador, and is based in St. John’s. He previously worked for The Telegram, The Compass and The Northern Pen newspapers during a career that began in 1991. He can be reached by email at: Terry.Roberts@cbc.ca.

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