The West White Rose Project calls for the development of additional resources to the west of the producing White Rose field offshore Canada
Husky Energy had put a hold on the West White Rose Project since March 2020.(Credit: Kristina Kasputienė from Pixabay)
Husky Energy has launched a review of its C$2.2bn ($1.67bn) West White Rose Project offshore Newfoundland and Labrador in Canada citing the prevailing Covid-19 pandemic and prolonged market uncertainty.
Slated to begin production in 2022, the offshore oil project in the Atlantic region has been in suspension since March 2020 due to the coronavirus outbreak.
The review comes in the wake of the ongoing suspension of major construction activities on the project, said the company. It also said that the decision was taken as it was reprioritising its capital due to the global economic downturn.
Currently, the West White Rose Project is 60% complete, said the Canadian energy company. However, all major construction work continues to be on hold while the company will look to determine a direction for the future, considering a start-up delay of more than 12 months owing to a tight offshore weather window.
Husky Energy said that construction pertaining to the project’s infrastructure at Argentia and Marystown in the Newfoundland and Labrador province was suspended in March and construction workers were demobilised because of the pandemic.
Husky Energy CEO Rob Peabody said: “A full review of scope, schedule and cost of this project is critical, given the minimum one-year delay to first oil caused by COVID-19, and our priority of maintaining the strength of our balance sheet with ample liquidity.
“Unfortunately, the delay caused by COVID-19 and continued market uncertainty leaves us no choice but to undertake a full review of the project and, by extension, our future operations in Atlantic Canada.”
Husky Energy’s original plans for the West White Rose Project
The West White Rose Project calls for the development of additional resources to the west of the producing White Rose field, located approximately 350km east of St. John’s on the eastern edge of the Jeanne d’Arc Basin.
The project will feature a fixed drilling rig, which is intended to be tied back to the existing SeaRose floating production, storage, and offloading vessel (FPSO).
According to Husky Energy, the project has an estimated peak capacity of 75,000 barrels of oil per day.
The Canadian energy company claimed that the West White Rose Project has been designed to yield light crude oil at low incremental cost and with lesser greenhouse gas emissions intensity compared to other crude oil projects across North America.