The following statement was issued today by Walter Noel, Minister of Mines and Energy. It was also read in the House of Assembly:

Benefits from White Rose project

I would like to advise members of the level of benefits that will accrue to the Province of Newfoundland and Labrador from the White Rose project.

Prior to receiving government approval in December 2001, Husky Energy committed to undertake a minimum of 80 per cent of the topsides engineering, fabrication and integration work in this province, with the remaining 20 per cent to be undertaken at facilities throughout Canada. This translates into approximately 2.8 million person hours to be completed in this province from a total of 3.5 million person hours associated with the topsides component of the project. Husky gave a further commitment to proactively identify measures and initiatives that will increase the level of Newfoundland and Labrador participation beyond that level.

The Department of Mines and Energy monitors the progress of the White Rose project on a continual basis in conjunction with the Canada-Newfoundland Offshore Petroleum Board. We continue to be given every assurance by Husky Energy and its main contractor for the White Rose topsides, Aker Maritime Kiewit Contractors (AMKC), that the work commitments for Newfoundland and Labrador will be met.

There are currently in excess of 350 people working on the White Rose project at AMKC�s facilities in Marystown and upwards to 300 people working at AMKC�s engineering offices in St. John�s. The number in Marystown is expected to peak at over 700 as fabrication and integration work advances.

The Department of Mines and Energy has been working diligently with Husky Energy, AMKC and local fabricators to have a portion of the work currently scheduled to be completed at facilities throughout Canada, undertaken in Newfoundland and Labrador facilities.

Government is hopeful that our collective efforts will meet with positive results. However, we must all recognize that success in bringing White Rose work to Bull Arm and other fabrication sites will ultimately depend on the ability of contractors to bid work on a competitive basis. There are very significant challenges associated with doing this. The Bull Arm site, for example, is a purpose built facility for the massive Hibernia project. There are significant start up and overhead costs associated with using the site which are difficult to absorb on a relatively smaller scope of work and still remain competitive. Also, local fabricators are bidding against fabrication yards throughout Canada which are in steady state operations and have lower costs than Bull Arm.

In light of these challenges, seeking additional work in the province will require a strong willingness on the part of all players to be realistic on what they would like to achieve from a project.

There is no entitlement on the part of Newfoundland and Labrador to have all the work associated with oil and gas projects undertaken here. This is a fallacy in today�s global economy. We do not live in a climate where investment is captive to this province. Oil companies have investment opportunities in every corner of the world and we have to be competitive to attract a portion of the investment dollars to this province. I believe that most of our local companies and our skilled workforce understand this and are prepared to compete.

I assure the people of Newfoundland and Labrador that our government will hold Husky Energy to its commitments on White Rose. We will also continue to work cooperatively with Husky Energy and other oil and gas companies to achieve the maximum benefits possible from our oil and gas resources while remaining an attractive place for investment in this sector.

2003 03 26                                       2:25 p.m.