Government pleased with sanction of White Rose Project

Premier Roger Grimes, Mines and Energy Minister Lloyd Matthews, and Industry, Trade and Rural Development Minister Beaton Tulk, said that today�s announcement by the White Rose proponents to sanction the project is exciting news for the province.

This morning, Husky Energy and Petro-Canada announced their intention to move forward with the development of the $2.35 billion White Rose project offshore Newfoundland and Labrador.

"I commend Husky and Petro-Canada for their ongoing commitment to this province," said Premier Grimes. "These companies are responsible corporate citizens who have committed to ensuring that every effort is made to maximize the levels of benefits to the people of the province.

"Today�s announcement is an indication that Newfoundland and Labrador is still a very attractive investment destination," said the premier. "An investment of this magnitude demonstrates this province�s competitiveness and the continued potential of our growing petroleum sector."

Over the estimated 10-15 year life of the White Rose field, over 1,000 direct and indirect jobs are anticipated to be created, $500 million in royalties are expected to flow to the province�s coffers and the provincial GDP is expected to increase by $6.8 billion.

"Our goal from the outset has been to ensure that provincial benefits from the development of White Rose are maximized where we have the capability to participate on a reasonable commercial basis," said Minister Tulk. "We have gone a long way to achieving that goal."

Commitments have been made by the project owners to undertake within Newfoundland and Labrador in excess of 80 per cent of the development phase work that can realistically be done in the province, and in excess of 80 per cent of all production phase employment.

"Of particular note is the high level of provincial participation in the strategically important areas of project management and engineering, as well as topsides fabrication and installation," said Minister Tulk. "Newfoundland and Labrador will play a substantially greater role in these critical areas with the White Rose project than we did going into the Terra Nova project."

Minister Matthews said that the positive impact that this will have on the provincial petroleum industry is very encouraging.

"Today, we witness the beginning of our third oil project. Our potential to mature and grow into a global petroleum player has been strengthened even further," said Minister Matthews. "Government is hopeful that this project will encourage new exploration in our offshore area, and subsequently lead to new discoveries and developments. We are confident that we will witness more growth in the future.

"As a government, we will increase efforts to encourage new exploration. This will hopefully lead to new discoveries and demonstrate that we are just at the beginning of discovering our potential," said Minister Matthews.

The White Rose field is located in the Jeanne d�Arc Basin, approximately 350 kilometres east of St. John�s. The South Avalon Pool was discovered in 1988 and is estimated to contain approximately 200-250 million barrels of oil.

Media contact:

Carl Cooper, Premier�s Office, (709) 729-3960
Josephine Cheeseman, Industry, Trade and Rural Development, (709) 729-4570
Darrell Mercer, Mines and Energy, (709) 729-5777

 

• The South Avalon Pool of the White Rose field was discovered in 1988. The project owners are Husky Energy Inc. (72.5 per cent) and Petro-Canada (27.5 per cent). Located 350 kilometres east of Newfoundland in the Jeanne d�Arc Basin, White Rose has an estimated 10-15 year production life and recoverable reserves of approximately 200-250 million barrels of oil in the South Avalon reservoir. A further 60-110 million barrels of recoverable oil in other ancillary pools may be developed in the future, depending on circumstances.
  
  
• Husky will develop the South Avalon Pool using a ship-shaped floating production, storage and offloading (FPSO) facility and a subsea system of wellheads (located in glory holes to guard against iceberg scour) and flowlines.
  
  
• The FPSO will have a storage capacity of 940,000 barrels of oil and a production capacity of 100,000 barrels of oil per day. A mobile drilling rig will drill all production, injection and support wells. Oil will be processed on the FPSO, transferred to shuttle tankers and subsequently shipped or transshipped to market.
  
  
• In March 2000, the proponent submitted a project description to the Canada-Newfoundland Offshore Petroleum Board (the board) which initiated the environmental assessment process under the Canadian Environmental Assessment Act (CEAA).
  
  
• The comprehensive study report, filed in October 2000, fulfilled the requirements under CEAA and, after a thorough review, the federal Environment Minister released the project from further review on June 11, 2001.
  
  
• In January 2001, pursuant to provisions of the Atlantic Accord Acts, the White Rose partners submitted a Benefits Plan and Development Application (DA) to the board, outlining the owners' plan to develop the project.
  
  
• A full public review of the DA was conducted by Commissioner Herb Clarke during the summer of 2001, culminating with the commissioner�s report to the board. After considering the public input, consultations were held with key stakeholders, and analysis of the recommendations, the board formulated its decision report, which was released to federal and provincial energy ministers on November 26, 2001.
  
  
• On December 19, 2001, ministers accepted the board�s decision to approve the development plan for the $2.35 billion White Rose oilfield, subject to the conditions set out in the board's decision report.
  
  
• These conditions relate to benefits, production and conservation of resources, safety of operations, and protection of the environment. The board is responsible for monitoring and ensuring compliance with these conditions, many of which must be satisfied before work permits can be secured.
  
  
• The proponents, after consideration of the board's decision report and commercial/business issues, are today announcing their decision to move forward with the White Rose project.

2002 03 28                        10:30 a.m.