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Success in 2021 & Optimism for 2022

To say 2021 was an exhilarating year may truly be an understatement. Recovery from the global pandemic and the 2020 collapse of oil prices was underway and Noia members worked hard to maintain their operations and get our offshore oil and gas industry up and running again.

While we are not where we hoped we would be before the pandemic struck, the industry has begun to rebound. The announcement from Suncor Energy that the Terra Nova FPSO ALE would happen was extremely positive news. The increased role of Cenovus Energy and Murphy Oil in that project, along with the positive signals about the West White Rose project and the CGS, have given everyone reason to be optimistic.

Hebron produced its 100 millionth barrel of oil and ExxonMobil Canada plans exploration next year. As well, there was a buzz throughout the industry when it was announced that Qatar Energy purchased a 40% interest of an ExxonMobil licence. Seeing a new player to our offshore gives everyone involved a reason to be optimistic.

Noia members have been greatly encouraged by the signals coming about for the Bay du Nord project with Equinor returning to the field for two exploration programs at Sitka and Cambroil East wells in 2022. The resource tally for that field is potentially one billion barrels with finds at Cappahayden and Cambroil included. The pervasive feeling is that it is a matter of when, not if, for this exciting project. While it would be the farthest offshore field in the world, due to several factors such as our light, sweet crude and improving technologies, Bay du Nord would also be our lowest carbon emitting project, and likely the lowest in Canada.

At Noia we were thrilled to recently host some in-person events for the first time in far too long. It was great to see our members face-to-face at Conference in September – the first in almost two years. While it was a scaled-down version of what Conference typically is, the feedback we received was incredible and there was a positive energy in the room for the two days. We held a diversity and inclusion session in November that was extremely successful with attendees bringing back important information to their organizations. I am also looking forward to our upcoming Christmas networking social and seeing even more members as we begin to enjoy the holiday season.

The question of how we commercialize our offshore natural gas has for too long been unanswered, though work is underway by proponents to see if it can happen. LNG Newfoundland and Labrador Ltd. and partners Miawpukek First Nation, DF Barnes, and Horizon Maritime are diligently at work on securing financing and markets and recently submitted components of the project for provincial environmental assessment.

Just recently 26 Noia members received funding from the Oil and Gas Industry Recovery Assistance Fund (OGIRA), and I was pleased to join Premier Furey, Minister Parsons, and Dr. Shea of Marine Institute at the announcement. As Premier Furey stated both there and at our conference, our industry leaders – Noia members – will lead the next phase of our energy sector and the economic development of our province. The projects announced illustrate the commitment our members have to improving our offshore oil and gas industry and ensuring its success, while lowering our carbon emissions – even further than they are now due to that light, sweet crude. The projects supported will help our industry grow and reach its potential.

Shortly after the OGIRA announcement, the provincial government announced that Cresta Fund Management had purchased a majority interest in the Come By Chance refinery. The newly named Braya Renewable Fuels will produce renewable diesel and sustainable aviation fuels. The agreement ensures the refinery continues operation, employs 200 local people, maintains supply to the island portion of the province, and has the potential to expand, including expansion into other energy sectors such as hydrogen. The first phase of the project would result in daily production of 14,000 barrels of renewable diesel and sustainable aviation fuel by mid-2022, while the second phase will likely double refinery capacity. According to the ownership of Braya Renewable Fuels, there is also potential for further expansion.

As we look to the future, 2022 is shaping up to be an exciting year for our industry. With exploration projects ready to go – along with other operators such as BP and BHP readying for exploration in 2023 – we are getting back on track. Noia is well-involved in a process to review our mandate and rebrand, as our members have given us a mandate to do so. We must be ready for the energy evolution and be a leader in that process, all while ensuring Noia members are a part of the process.

Noia is also thrilled to begin work on the Net Zero Project with econext and OilCo, as supported by the OGIRA funding. We want to lead our industry and our province in creating the pathway to net zero. Our province and country have established laudable and important objectives with respect to net zero and Noia believes we can not only be a part of the solution, we can lead the process.

While we are engaged in a global energy evolution, we must always remember where we came from and what has provided us with so much benefit – the offshore oil and gas industry. We must also remember there remains space for oil and gas from Newfoundland and Labrador as part of that global energy evolution. Global demand for oil is rising as we return to many of our pre-pandemic activities and currently stands at about 100 million barrels per day. There is also a supply deficit, estimated by Goldman Sachs to be about 2.5 million barrels per day. We strongly believe our low carbon oil – produced with the highest of ESG standards – should meet that demand. We should use the abundance of energy in Newfoundland and Labrador – offshore oil and gas, hydrogen, hydro and more – to complete our energy mix and supply the world.

Together, we can achieve that. We started in earnest in 2021 and 2022 will see exceptional growth, opportunity, and success. I am confident of that.

Enjoy your holidays and I look forward to a bright and prosperous 2022 for the offshore oil and gas industry and our broader energy sector; prosperity we will achieve together.

Take care,