Nfld. & Labrador

Is Husky seeking concessions on White Rose extension? Siobhan Coady not ruling it out

Natural Resources Minister Siobhan Coady will say only that she wants to make sure the project gets sanctioned.

Natural resources minister says she wants to make sure the project gets sanctioned

Siobhan Coady is the minister of natural resources in Newfoundland and Labrador. (Ted Dillon/CBC)

The Newfoundland and Labrador government is not ruling out making concessions to oil companies in order to ensure the long-delayed West White Rose extension project is sanctioned.

When asked this week if that's a possibility, Natural Resources Minister Siobhan Coady was vague.

"We'll certainly have discussions with them in terms of how best to make sure this project gets sanctioned," Coady said.

"We want to make sure of that. But we will want to make sure to maximize the opportunity for this province in terms of the number of people employed, in terms of the benefits to this province."

Questions mounting 

So might this mean less construction work being done in this province? Lower royalties?

That's unclear, and Coady would not give any further details.

The lead partner in the project, Husky Energy, is also keeping quiet.

"Work continues behind the scenes on a number of fronts and it would be inappropriate to speculate about it," a Husky spokesperson said in an email to CBC News.

This is a schematic diagram of the wellhead platform gravity base structure layout option. It is shown connected to to existing infrastructure in the White Rose field, including the SeaRose FPSO. (Husky Energy)

But questions are mounting as the weeks drag on without the sanctioning of the project. And with the Hebron project now completed and ready to be towed out of Trinity Bay, the focus is squarely on West White Rose as the next major construction project in this province's oil and gas industry.

Coady said "serious conversations" are taking place, and she's hopeful the project will get a green light soon from lead partners Husky and Suncor.

Nalcor, Newfoundland and Labrador's energy corporation, also has a five per cent equity stake in West White Rose.

Wellhead platform preferred option

The companies are assessing the viability of constructing a wellhead platform for the White Rose field, which will be tied back to the existing SeaRose FPSO (floating, production, storage and offloading).

The platform will appear similar in appearance to Hibernia and Hebron, but its primary function will be drilling.

Sources say Husky has ruled out a subsea option, which would be cheaper, but not recover as much oil as a wellhead platform.

The concrete gravity structure will be constructed in a specially built graving dock in the Port of Argentia, in Placentia Bay.

The topsides will consist of drilling facilities, wellheads and support services such as accommodations for 120 to 130 persons, utilities, a flare boom and a helideck, according to documents prepared by Husky.

Sources say the topsides will likely be built by Kiewit at a fabrication yard in Texas, and the overall cost of the project could range from $3 billion to $4 billion.

Husky deferred the project nearly three years ago after oil prices cratered, and sources say the project remains marginal at today's prices.

"They're doing everything they can to be thrifty," said an oil insider.

The company has said a decision on sanctioning will come this year.

The West White Rose reservoir is said to hold an estimated 115 million barrels of recoverable oil. First oil is at least three years away

About the Author

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