SPECIAL REPORT: Facets of family violence
What you need to know about COVID-19 today
Daily forecasts and weather facts from Cindy Day
Have you heard about the SaltWire News app?
Continuing coverage: Mass shooting in Nova Scotia
Business Tool Kit 2021
IN DEPTH: Covering a contentious lobster fishery
SaltWire Selects: Stories you don't want to miss
Agreement needs to be formalized before end of March
It's not a surefire deal, but the provincial government and the owners of the Terra Nova project have offered a glimpse of how the companies might benefit from the federally-funded Newfoundland and Labrador Offshore Oil and Gas Industry Recovery Assistance Program.
Late Thursday afternoon, the province issued a news release announcing a non-binding memorandum of understanding (MOU) between government and the project's owners. The province said it's willing to provide up to $175 million from the fund on a matching-contribution basis. Under the terms of the MOU, a formalized agreement needs to be reached by the end of March.
"The province’s offer is contingent on a commitment to restart operations and finalize a plan for long-term production," government said in the release.
Also on the table as part of the non-binding agreement is a potential change to royalty rates for the project. The release states the province is willing to modify its royalty regime as part of a formal agreement.
Work to extend the life of the Terra Nova floating production, storage and offloading vessel has been stalled, and the Terra Nova field has not produced oil for over a year.
In the release, Premier Andrew Furey said government is still working to ensure long-term stability for the province's oil and gas sector.
"This MOU reflects a commitment by the Terra Nova owners to continue discussions on establishing a viable path forward for the project," the premier said. "With this financial commitment on the table, we are hopeful that together we will see a future for Terra Nova and its workers.”
Suncor is the operator of the project with a 37.7 per cent ownership stake. Other companies involved in Terra Nova are ExxonMobil Canada, Equinor Canada, Cenovus Energy's Husky Energy, Murphy Oil Company, Mosbacher Operating and Chevron Canada.
“For almost two decades, the Terra Nova project has played a pivotal role in the Newfoundland and Labrador offshore energy industry, supporting the local workforce and supply community," Suncor's East Coast vice president Josée Tremblay said in the release. "With today’s announcement, we have greater certainty and clarity as we develop the path forward for Terra Nova and we are optimistic regarding the future of the project.”
$288 million of the $320-million fund has been earmarked for operators of existing offshore installations. So far, the West White Rose and Hibernia projects have received $79.5 million, with the projects’ owners matching that total. Those funds are meant to support direct and indirect employment in Newfoundland and Labrador.