$320M in subsidies `a first step' to help buoy offshore oil industry
Work will not resume on a troubled Newfoundland and Labrador offshore oil project soon despite $320 million in new industry subsidies from the federal government.
“Our offshore has been impacted by the double whammy of a global pandemic and an oil price war,” Natural Resources Minister Seamus O'regan said in St. John's on Friday, as he announced $320 million in funding for Newfoundland and Labrador's offshore oil industry, which has been rocked by low prices and the threat of cancelled projects.
A joint task force will determine how to spend the funds to support the province's offshore oil and gas industry, but much of O'regan's speech was focused on how the money would help oil firms reduce emissions at their offshore projects.
“We are listening to you,” said O'regan, who is the member of Parliament for the federal electoral district of St. John's South-Mount Pearl, and has been under pressure in his home province to support its largest industry.
Newfoundland and Labrador Premier Andrew Furey said, “help is here,” and added, “this is just the beginning.”
The money, however, won't restart construction on a stalled and under-review, $1.2-billion offshore oil project called West White Rose this year or even next year, according to a key backer of the project.
“We look forward to working with the province as it determines how best to use the funding announced today by the federal government,” Husky spokesperson Dawn Delaney said in an email, calling it a “first step.”
Delaney said the company's review of the project and its Atlantic Canada operations are ongoing.
Husky paused construction on the West White Rose project when the coronavirus pandemic hit and contributed to an oil price collapse earlier this year. On Sept. 9, the Calgary-based company announced it would review and potentially pull out of the project without the provincial or federal government taking a stake in the project.
Since that announcement, labour union Unifor organized a protest in St. John's demanding support for the project, which is 60-per-cent complete and supports 1,500 jobs.
“Although it has taken us a great deal of time to get to today, we welcome the support of the Government of Canada and this investment in our offshore,” Newfoundland and Labrador Oil and Gas Industries Association (NOIA) CEO Charlene Johnson said in a release following O'regan's announcement.
Johnson said the industry will work with the provincial government and focus “on other important issues that can get people back to work.”