Newfoundland and Labrador’s Noia discourages abandoning offshore Terra Nova Project

5/3/2021

Suncor Energy on Friday issued Expressions of Interest (EOI) related to the Terra Nova Floating, Production Storage and Offloading (FPSO) vessel located on the Terra Nova offshore field.

Two EOIs prepare for decommissioning of the FPSO and the field and another provides an update to a previous EOI preparing for remediation of the FPSO to support the asset life extension project. Noia is deeply concerned about the potential to decommission and abandon the Terra Nova Project.

“Noia members and our Board of Directors are deeply concerned for the future of the Terra Nova Project and the far-reaching impacts decommissioning and abandonment would have upon our industry, the people who work in it, and our province,” Noia CEO Charlene Johnson said. “The Terra Nova Project employs about 900 people directly and thousands more when you consider the indirect and induced employment of those involved in the supply and service sector who lend their expertise in areas such as transportation, maintenance, environmental protection, health and safety, catering, and so much more. If this project does not continue, the impact on these people, their families, and the companies they work for, will be devastating.”

On Jan. 14, the Government of Newfoundland and Labrador announced a non-binding Memorandum of Understanding had been reached with the project owners. The province also committed up to $175 million on a matching contribution basis and possibly modifying the royalty regime should an agreement be reached. This commitment was based on an agreement for long-term production via the Terra Nova Project. Noia is requesting that all parties involved find a positive resolution as quickly as possible.

“I understand the deadline to reach a deal on the Terra Nova Project was extended to April 30 – which has now passed – and Noia is encouraging all parties to reach an agreement as quickly as possible,” Johnson said. As it stands, we are perilously close to losing the 2021 season for maintenance and upgrades to the vessel, which in turn has a significant impact on Noia members in the coming years. Truthfully, I find it hard to even speak of decommissioning. With the potential of our offshore, including the potential for an additional 80 million barrels from the Terra Nova field, these are not conversations I expect or want to have.”

All parties are still at the table and the deal is not dead, Noia said.

“I want to see Noia members pursuing EOIs related to the asset life extension project of the Terra Nova FPSO and the many spinoff opportunities associated with the project for years to come,” Johnson said.

The Terra Nova field has produced approximately 425 million barrels of oil with the asset life extension project expected to capture another 80 million. Noia members look forward to being a part of the process to recover those additional barrels of oil and the project continuing to bring well-paying jobs and economic stimulus to Newfoundland and Labrador.The Newfoundland and Labrador Oil and Gas Industries Association (Noia) was founded in 1977 to represent the supply and service sector of the offshore oil and gas industry. Today, Noia represents approximately 460 member organizations worldwide which are involved in, or benefit from, the oil and gas industry of Newfoundland and Labrador. Noia members are a diverse representation of businesses that range from offshore supply boats and helicopters, health and safety equipment and training, engineering solutions and fabricators to law firms and human resource agencies.

 
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