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Executive Council
Natural Resources
October 10, 2013

Premier Announces Significant Advancement in White Rose Extension Project

Today, the Honourable Kathy Dunderdale, Premier of Newfoundland and Labrador, joined Husky Energy and its partners in Placentia to announce an agreement to advance the development of the White Rose Extension Project.

“This is an exciting day for us, and for an industry which has provided tremendous benefit to the people of our province,” said Premier Dunderdale. “Through development of the White Rose Extension Project, the province will gain an estimated $3 billion in royalties, return on investment through Nalcor Energy, and corporate income tax. By working together on agreements such as the one announced today, we are securing opportunities for a vibrant economy in this province that maximizes benefits for Newfoundlanders and Labradorians.”

Amendments to the benefits terms of the 2007 White Rose Expansion Project Framework Agreement will allow for the development of West White Rose using a wellhead platform, instead of the subsea development originally planned. The platform will have a stand-alone concrete gravity structure and topsides which will be tied-back to the existing SeaRose Floating Production and Storage Offloading (FPSO) vessel.

“Using a wellhead platform for this project signals an innovative way of developing smaller satellite developments in Newfoundland and Labrador,” said the Honourable Derrick Dalley, Minister of Natural Resources. “This option demonstrates prudent resource development by increasing recoverable oil and extending the field’s life.”

The wellhead platform will deliver an estimated 115 million barrels of oil. Full development of the White Rose main field and all satellite tie-backs together including the White Rose Extension, is estimated to generate over $7 billion in total to the province.

Employment benefits for Newfoundlanders and Labradorians will be significantly enhanced compared to the original subsea concept. A total of 12,000 person years, which includes approximately 250 new platform positions, will be created over the life of the project. The development phase of the project alone is expected to generate 2,800 person years in the province.

To enable construction of the concrete gravity structure, a graving dock complete with gates will be built in Argentia by the proponents. The construction of these gates represents a new, significant piece of infrastructure in the province and is reusable for future industrial work.

“Today’s announcement will see Argentia become an important new player in the Newfoundland and Labrador offshore oil industry,” said Felix Collins, MHA for Placentia-St. Mary’s. “This will result in continued opportunities for regional growth and development as well as spin-off benefits for residents and businesses in the area.”

The lease for the graving dock and gates will be between the operator and the Argentia Management Authority.

“The wellhead platform project and gated graving dock facility advances AMA’s vision for Argentia as this province’s premier heavy industrial seaport,” said Harvey Brenton, CEO, Argentia Management Authority. “It will generate economic activity for our region and our province for many years to come.”

The White Rose oilfield is located on the northeastern Grand Banks approximately 350 kilometres east of St. John’s. Husky Energy is the majority owner and operator of the White Rose oilfield and its satellite expansions.

“This agreement is an important step in our approval process, and allows us to advance plans for a wellhead platform,” said Malcolm Maclean, Husky’s Vice President, Atlantic Region. “The Atlantic Region is an important growth pillar for Husky and our continued investment, both through exploration drilling and development of projects such as this, underscores our commitment to being here for the long term. A final investment decision will be contingent on appropriate regulatory, corporate and partner approvals.”

The White Rose Extension Project is a joint venture between Husky Energy, Suncor Energy, and Nalcor Energy.

“Several development options were carefully evaluated,” said Sandy Martin, Vice President, East Coast for Suncor Energy. “In the end we collectively aligned on the wellhead platform as the preferred development option. This option maximizes the benefits for all parties including the province and the project proponents. I want to commend everyone involved in getting us to this important milestone.”

The Government of Newfoundland and Labrador, through Nalcor Energy, has a five per cent equity stake in the White Rose Expansion Project.

“We are very pleased to see continued reserve growth in our first offshore investment,” said Ed Martin, Nalcor Energy’s President and CEO. “This wellhead platform will allow us to drill new areas of the White Rose field and extend field life thereby opening further possibilities for value creation. Nalcor's partnership in White Rose is a key revenue generator in our project portfolio.”

Highlights of the amended agreement are outlined in the backgrounder below.

The offshore petroleum industry is the largest contributor to the provincial GDP at 33 per cent with an oil production value of over $8 billion and royalty revenues of $2 billion in 2012.

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Media contacts:

Jennifer Tulk
Director of Communications
Office of the Premier
709-729-3570
jennifertulk@gov.nl.ca
Tracey Boland
Press Secretary
Office of the Premier
709-729-4304, 697-3128
TraceyBoland@gov.nl.ca
Diana Quinton
Director of Communications
Department of Natural Resources
709-729-5282, 631-8155
dianaquinton@gov.nl.ca
Tess Burke
Communications Manager
Government Members Office
709-729-3551
TessBurke@gov.nl.ca
Colleen McConnell
Senior Communications Specialist
Husky Energy
709-724-3504
colleen.mcconnell@huskyenergy.com
John Downton
Manager, Communications & Stakeholder Relations
Offshore Operations
Exploration & Production
Suncor Energy Inc.
709-778-3692
jdownton@suncor.com
Aimee Igloliorte
Communications Advisor
Nalcor Energy
709-570-5953, 631-9914
aimeeigloliorte@nalcorenergy.com
Harvey Brenton
Chief Executive Officer
Argentia Management Authority Inc.
709-227-5502
w.brenton@argentia.ca


BACKGROUNDER
Amendments to White Rose Extension Project Agreement

Highlights to amendments regarding the benefits terms of the 2007 White Rose Expansion Project Framework Agreement include:

2013 10 10                                     3:00 p.m.

 
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