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TradesNL optimistic about oil and gas projects for Newfoundland but it’s been a tough waiting game

TradesNL watching closely for developments in West White Rose re-start and Bay du Nord

The group that represents 16 trade unions and about 18,000 tradespeople in Newfoundland and Labrador is optimistic for the restart of the West White Rose expansion project, following this week’s annual conference of the Newfoundland Offshore Industry Association (NOIA).

Jonathon Brown, senior vice-president of Cenovus Energy, told conference delegates the company has been doing various things to preserve and maintain the project.

Construction of the Concrete Gravity Base (CGS) at Argentia was halted last spring, due to COVID and the impact of the pandemic on the oil and gas industry.

Work on the living quarters for the CGS continued at Marystown, thanks in part to a $41.5-million oil and gas industry response fund, announced last year by the province and federal government. That work was recently completed.

Brown did not offer specific promises, or timelines, about when the Argentia construction site might ramp up again. A final decision is expected by the middle of 2022.

He did offer some optimism however, by saying, “Don’t think about this as switched off. Think of it as turned down.”

That’s one of the reasons TradesNL is “cautiously optimistic” the project will resume.

“Based on the discussions I’ve been part of and based on what I heard yesterday, I am hopeful the White Rose project will get back on track,” executive director Darrin King told SaltWire.

In fact, he said, there will be some activity at the Argentia site in the coming weeks.

“We’ll get up close (to) 100 people on site out there this fall to do some new scopes of work that we didn’t anticipate,” King said.

TradesNL is also hopeful that Equinor’s Bay du Nord project will proceed within the next couple of years.

Torstein Hole, president of Equinor Canada, told the NOIA conference that while the company is changing, turning its attention to wind and solar power, with the goal to reduce carbon emissions and “be a net-zero company by 2050,” it is still focused on oil and gas in offshore Newfoundland.

“Oil and gas will remain an important source of energy for years to come, even as companies pursue low-carbon,” he said, adding the demand for oil and gas by next year is expected to return to pre-COVID levels.

This year Equinor was busy with subsea surveys in the Flemish Pass Basin.

In 2022, it plans to drill on its Cappahayden and Cambroil discoveries and explore at two more locations — Sitka and at another site close to the Cambroil discovery.

The six fields in the Bay Du Nord area could yield up to 200,000 barrels of oil daily.

However, the company is not prepared to announce any final decisions on when, and how, it will proceed with actually drilling. It all depends on finances.

“Important progress has been made to improve the break-even aspects of the project,” said Hole. “We are still some ways way from a final investment decision.”

“We are still some ways way from a final investment decision.” — Torstein Hole


Waiting game

Playing the waiting game has been tough for the tradespeople who depend on the oil and gas industry contracts for their paycheques.

It’s been a tough 18 months, King acknowledged.

“The numbers from Statistics Canada show the unemployment rate around 20 per cent, and our internal numbers put us even a little higher than that,” he said.

Before COVID, he said, 2,700 people were working on the White Rose project at Argentia during peak construction.

Today only 30 to 40 tradespeople are there.

At the same time another major energy project — Muskrat Falls — is winding down.


Newfoundland and Labrador’s Muskrat Falls hydroelectric project

“There are about 200 people at Muskrat and by mid-November we’ll pretty well be done up there,” said King.

There are a handful of other projects that could provide work for tradespeople in the coming months, he said.

Currently, there are a couple hundred trades employed on the Voisey’s Bay mine expansion project in Labrador.

“Every other day we’re sending people down there as new contracts come out,” he said.

There’s also potential for work at the Iron Ore Co. of Canada in Labrador.

“There’s a number of major maintenance contracts coming up there through this winter and into the spring and there’s a good opportunity for trades workers to get some work there,” he said.

And at the White Rose project, King said, “I’m hopeful that in 2022 we could see 300 to 500 people back to work out there, moving towards a reactivation of the whole project.”

TradesNL is also keeping a close eye on the refinery in Come By Chance. They’re hopeful that if the deal for purchase of the refinery is concluded this fall, work to retrofit the facility will offer more employment for the trades.

There’s still no word on whether current owners Silverpeak and the potential buyer, Cresta Fund Management, have reached a sales agreement in principal, and they have set Sept. 30 as the deadline to conclude the deal.

King added tradespeople are also getting work on some publicly funded construction projects on the island — like the new Waterford Hospital and a long-term care facility on the west coast.

“And we have a number of people who are out of the province … out West for maintenance projects in Alberta, and some are working on a couple of projects in British Columbia,” King said.

“People, generally, are doing what they need to do to stay working.”

But not all tradespeople who were working oil and gas prior to COVID have managed to find work.

“There’s still a fair chunk of people who, through government assistance, are just hanging on … hoping that some of these offshore projects get back onstream,” said King.

That government assistance — through the Canada Emergency Response Benefit (CERB) — is due to end this month.

King expects some the older tradespeople might choose to hang up their tools in favour of retirement.

“What they will do is hard to say,” he said.

Depending on their age, said King, some will retire and others might leave the trades altogether and either retrain or take work in another occupation.

“So there are people who will have to make some tough choices,” he said.

Source: Saltwire| This text was excerpted from the media outlet cited on September 24th 2021 and is provided to Noia members for information purposes only. Any opinion expressed therein is neither attributable to nor endorsed by Noia.