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Husky cancels West White Rose construction work for 2021

The West White Rose concrete gravity structure in December 2019 with all four of its lower quadrants in place. Husky Energy is now reviewing the project's future. 
 — Photo courtesy Husky Energy
The West White Rose concrete gravity structure in December 2019 with all four of its lower quadrants in place. — Photo courtesy Husky Energy

Announcement comes one day after news of Cenovus Energy’s purchase of oil and gas company

One day after the announcement of Cenovus Energy’s purchase of Husky Energy, the latter company confirmed construction work for the West White Rose offshore oil project will not proceed in 2021.

In early September, Husky announced it was reviewing the project’s future. Construction activity at sites in Argentia and Marystown was suspended in mid-March due to the COVID-19 pandemic. At the time, that work was 60 per cent complete — the remaining work was valued at $1.1 billion.

A volatile global oil and gas market has cast a shadow over the industry in Newfoundland and Labrador, leading to massive layoffs. On Sunday, Cenovus and Husky jointly announced a plan that will result in the companies’ operations merging under the Cenovus Energy brand. Cenovus is buying Husky in an all-stock deal valued at $3.8 billion.

In response to questions from The Telegram about West White Rose’s future in light of Sunday’s announcement, a spokeswoman for Husky confirmed the company's plans for the project.

The Huskey Energy CGS construction site in Argentia. - Contributed
The Husky Energy CGS construction site in Argentia. - Contributed

“Following our review, Husky has cancelled the 2021 (West White Rose) construction season, however we continue to work with the government to discuss how the federal dollars allocated to the offshore can support the long-term success of White Rose and the offshore, including determining whether some scopes of work can proceed and help position the project for restart when commodity prices recover,” the spokeswoman said.

Until the transaction closes — an event expected to happen in the first quarter of 2021 — Cenovus and Husky will continue to operate as separate, independent companies, the spokeswoman added.

A month ago, the federal government announced a $320-million fund to support Newfoundland and Labrador’s oil and gas industry. A provincial task force is determining how to best use those funds. It’s due to offer initial recommendations on eligibility parameters and prioritization criteria next month. Recommendations to the provincial Oil and Gas Industry Development Council on immediate actions to take in relation to the fund are due no later than mid-January 2021.

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