From CBC News
The following text was excerpted from the media outlet cited on April 9, 2020 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.
Offshore regulator ordered a halt to production on the Terra Nova in December because of safety concerns
In yet another setback for Newfoundland and Labrador’s offshore oil industry, a planned overhaul of the floating platform at the Terra Nova field at a Spanish shipyard this year is now in limbo because of COVID-19.
“We are currently evaluating alternate options for the Terra Nova” life extension project, a Suncor official wrote Wednesday afternoon in a statement to CBC News.
The floating production, storage and offloading (FPSO) vessel was scheduled to arrive at the Navantia shipyard in southern Spain in May, with the work to be completed in September.
But with Spain locked in the grips of the COVID-19 pandemic, those plans have now been shelved.
“Spain is no longer able to accommodate the dry dock slot,” the Suncor statement added.
It’s the second time in as many weeks that the situation in Spain has dealt a blow to the offshore industry off Canada’s east coast.
CBC reported last week that the drillship Stena IceMAX was unable to leave port in the Spanish Canary Islands because of concerns over the virus.
The IceMAX has been contracted by the Chinese oil company CNOOC International to do exploration drilling in the Flemish Pass, but was unable to enter Canadian waters because of the pandemic.
The industry is also reeling from news that Hibernia is poised to suspend drilling activities next month and lay off workers as part of a broader cost-cutting strategy.
As well, the owners of the Come By Chance oil refinery have also decided to temporarily stop making fuels and send home most of its employees.
Work on Husky’s West White Rose project has also ground to halt, and other oil players, including Equinor, have announced measures to trim spending and find efficiencies.
Bad news for aging installation
It’s all in response to a sharp decline in prices due to a collapse in oil consumption, and the challenge of storing the growing inventory of oil.
For the Terra Nova FPSO, this means a plan to extend the life of the vessel by 10 years in order to produce an additional 80 million barrels of oil is now on hold.
That’s bad news for the operator, Suncor Energy, and its six partners, its workers, and a cash-strapped provincial government that is heavily dependent on oil revenues.
And it’s just the latest trouble for an aging installation that hasn’t produced oil since late December, when it was ordered to shut down by the board that regulates the province’s offshore industry.
On Dec. 19, the C-NLOPB ordered Suncor to suspend oil production because the company had not met the standard for having redundant fire water pump systems onboard the installation.
While the water pump issue has been corrected, the production suspension order remains in effect “while Suncor carries out other maintenance work and implements corrective actions with respect to their maintenance management system,” according to a statement Wednesday from the board.
Meanwhile, the Terra Nova platform, which began producing oil in 2002 some 350 kilometres southeast of St. John’s, remains on-station in the offshore.
The FPSO can accommodate up to 120 workers, but Suncor says only essential staffing levels are being maintained as a health and safety precaution in this era of COVID-19.
“The team onboard is focused on safely carrying out essential critical maintenance work,” the Suncor statement reads.