Cenovus sees reviving offshore oil project as offering `superior value'
Cenovus Energy Inc. plans to restart the West White Rose oil project off the coast of Newfoundland and Labrador after construction was halted in 2020 as oil prices plunged during the pandemic.
The Calgary-based oil and gas producer announced Tuesday that construction will resume in full next year and that it anticipates the first oil from the platform will be produced in 2026.
The project is about 65 per cent complete, with some work done over the past 16 months to firm up cost estimates and rework the project plan, Cenovus said in a release.
“The joint venture owners have worked together to significantly de-risk this project over the past 16 months,” Cenovus president and CEO Alex Pourbaix said in the statement. “As a result, we're confident restarting West White Rose provides superior value for our shareholders compared with the option of abandonment and decommissioning.”
In early 2020, then-owner Husky Energy Inc. announced it would suspend work on the project as global oil prices plummeted during COVID-19 lockdowns.
Cenovus acquired Husky in 2021 for $9 billion, including debt, and later announced an agreement to restructure both the Terra Nova and West White Rose projects with partner Suncor.
As part of the restructuring, the two oil giants agreed that Cenovus would decrease its working interest in the White Rose field and satellite extensions while Suncor would take a larger stake.
Cenovus said it has reduced its stake in the original field to 60 per cent from 72.5 per cent and to 56.375 per cent from 68.875 per cent in the satellite extensions. A provincial Crown corporation, Nalcor Energy, has a five-per-cent working interest in the satellite fields.
West White Rose is located in the Jeanne d'arc Basin, 350 kilometres east of Newfoundland and Labrador in approximately 120 metres of water.
Cenovus said its peak production is anticipated to reach approximately 80,000 barrels per day, 45,000 of which is net to Cenovus, by the end of 2029.