Suncor aims for early 2023 production restart for Terra Nova FPSO
With overhaul now complete, production vessel set to return to N.L.'s offshore oil sector
It's later than originally planned, but Suncor Energy is aiming for an early 2023 resumption of production in the Terra Nova oilfield off Newfoundland's coast.
If those plans become reality, all four mature fields in the offshore sector will once again be producing oil for the first time in more than three years.
The Terra Nova, a 300-metre floating production, storage and offloading vessel with capacity to store nearly one million barrels, remains at the Navantia shipyard in Ferrol, Spain. The Terra Nova FPSO arrived at the state-owned shipyard a year ago, has undergone an extensive life extension overhaul, and is scheduled to return to Canadian waters by the end of this month, according to information in Suncor's third quarter financial update.
The goal is a "safe return to production in early 2023."
Production is expected to reach about 29,000 barrels per day next year.
The extension is expected to extend production life by about 10 years, providing an additional 70 million barrels of oil.
A Suncor official declined an interview request but said in a written statement, "As we get closer to Terra Nova returning to service, we will look for opportunities to provide additional information."
Salvaged from the scrap heap
It's a notable turnaround for a project — one of four producing oilfields in the provincial offshore industry, along with Hibernia, Hebron and White Rose — that nearly collapsed during the pandemic. Suncor has an ownership stake in all four fields.
The Terra Nova has not produced oil since late 2019, and a scheduled overhaul in 2020 was cancelled because of the pandemic.
With oil markets in disarray, some of the seven joint partners losing interest in the project, and the Terra Nova rusting at dockside in Bull Arm, Trinity Bay, oil executives began raising the prospect of decommissioning and abandonment of the oil field, which had a total direct employment of roughly 850 people at the end of 2019.
But a last-minute ownership shakeup — along with financial support from the provincial government — 15 months ago helped salvage the project.
Now, only three of the seven companies remain, with lead operator Suncor — who has an ownership stake in all four oil fields — holding a majority ownership at 48 per cent. The other owners are Cenovus Energy, at 34 per cent, and Murphy Oil, at 18 per cent. All three companies increased their ownership substantially after Equinor, ExxonMobil Canada, Chevron and Mosbacher Operating left the project.
Financial support and royalty concessions from the provincial government have been estimated at more than $200 million.
The offshore supply ship Maersk Mobiliser, which is now dockside in Ferrol, Spain, according to an online vessel tracking website, is expected to accompany the Terra Nova back to Newfoundland waters before the end of the month.
According to Suncor's most recent industrial benefits report, some 574 people were working on the Terra Nova project at the end of March 31, including 486 residents of Newfoundland and Labrador.
The company also reported that operational and capital expenditures for the Terra Nova project in the first quarter of 2022 totalled $74.8 million, with 63 per cent of that spent in Newfoundland and Labrador.
The Terra Nova FPSO produced first oil in the Jeanne d'Arc Basin in January 2002, becoming Newfoundland and Labrador's second producing oilfield, after Hibernia. The field is located 350 kilometres east-southeast of St. John's, and 35 kilometres southeast of the Hibernia field.
The original plan was for the Terra Nova to return to production by the end of 2022. The company has not commented on the delay.
ABOUT THE AUTHOR
