Header Menu: Top-Right


Commodity Pricing

Feds announce $320M for N.L.’s struggling offshore industry

The federal government has pledged $320 million to support offshore oil jobs in Newfoundland and Labrador.

Natural Resources Minister Seamus O’Regan was in St. John’s on Friday to announce the new measures, after six months of lobbying from oil industry groups and workers demanding assistance.

O’Regan said the money will “support jobs and ensure the sustainable, long-term, lower-emitting future for our offshore.”

He said it will be spent on safety improvements, maintenance and upgrades of existing offshore infrastructure, environmental services and clean technology.

Newfoundland and Labrador Premier Andrew Furey announced a new task force will decide how the money is spent.

While many details remain unclear, what is known is that the aid does not come in the form that major industry players were rooting for. Husky was asking the federal government to invest in equity stakes in its major projects in the province while the offshore advocacy group NOIA was rooting for tax credits and investment incentives.

The announcement comes after six months of crushing losses for the province’s offshore oil industry. Workers took to the steps of Confederation Building last week to speak about the anxiety they feel amid layoffs and cutbacks.

The biggest blow to the province could be still to come. Husky Energy has announced it’s reviewing the West White Rose extension — a $2.1-billion project in Placentia that employs more than 600 people on a daily basis — with the possibility of canning the entire job.

Problems started in March with the onset of the pandemic in North America coupled with a price war between Saudi Arabia and Russia, which sent oil and gas prices into a nosedive.

Since then, Suncor has anchored its idled Terra Nova FPSO in Conception Bay, the long-standing Hibernia platform has suspended drilling, and future ventures that once sounded lucrative and promising have been shelved.

The result, according to Charlene Johnson, leader of the Newfoundland and Labrador Oil and Gas Industry Assocaition, has been thousands of job losses and local companies closing up shop.

O’Regan acknowledged on Friday that the industry is “suffering from a double-whammy.”

He said the new measures are a practical program, “because we believe in our workers. We believe in this industry. And we believe in its future.”

O’Regan also said the federal government is trying to strike deals with the owners of the West Aquarius and Transocean Barents exploratory rigs to support future development in the offshore industry.

Source: CBC | This text was excerpted from the media outlet cited on September 25, 2020 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.