The Honourable Andrew Furey, Premier of Newfoundland and Labrador, today announced support for the West White Rose Project – the first project to be funded under the Oil and Gas Industry Recovery Assistance Fund (Fund). Husky Energy on behalf of the West White Rose partners will receive $41.5 million (50 per cent of total project costs) to maintain jobs in the near-term and protect the option of re-starting the West White Rose Project in 2022, if conditions permit.
Premier Furey was joined by the Honourable Andrew Parsons, Minister of Industry, Energy and Technology; the Honourable Seamus O’Regan, federal Minister of Natural Resources; Bill Fanning and Karen Winsor, Co-Chairs of the Oil and Gas Industry Recovery Task Force (Task Force); and Jonathan Brown, Senior Vice President, Atlantic Region, Husky Energy.
On September 25, 2020 the federal government announced $320 million to be administered by the Province to support direct and indirect employment in the Newfoundland and Labrador oil and gas sector and activities that generate environmental and co-benefits. Established by Premier Furey, the Task Force was asked to develop recommendations on eligibility parameters and priority criteria for the Fund.
Three target areas for the Fund have been identified by the Task Force:
· Maintenance of existing installations;
· Increasing production in the basin; and,
· Accelerating production.
Its recommendations also outline key evaluation criteria for eligible proposals including employment impacts; amount of applicant contribution; and environmental benefits and sustainability.
The Task Force has recommended a two-stream approach for the solicitation and evaluation of funding proposals. Stream one totals $288 million and targets operators of existing offshore installations. The remaining $32 million is allocated to stream two for support of the service and supply community.
The Provincial Government has received funding proposals from all four project operators for stream one while funding for stream two will be provided to applicants in response to a government issued, time-limited Call for Proposals. Further details on the Call for Proposals will be available in the near future.
As part of stream one, the West White Rose Project will receive $41.5 million from the fund which the partner companies will match to undertake in-province work relating to the West White Rose Project and maintain jobs. The proposed work includes activities necessary to support a potential restart of the project such as topsides fabrication, procurement, and subsea and marine operations. This project will provide in-province employment for 169 people in project management and engineering, as well as 162 tradespersons in Argentia and Marystown for a total of 331 people. All work is to be completed in 2021.
Discussions between government and operators regarding other proposals are ongoing as proposals continue to be assessed. Further projects are expected to be announced in the coming weeks.
Newfoundland and Labrador’s offshore oil and gas industry represents one of the lowest carbon per barrel footprints in the world. It has contributed more than $22 billion in royalties (to the end of 2019) and directly employed over 6,000 people as well as thousands more in supporting industries (at the end of March 2020).
In May 2020, the Provincial Government committed to net zero emissions by 2050. Newfoundland and Labrador fully supports protecting the environment, reducing carbon emissions and achieving net zero by 2050. Through its own commitment to net zero, the offshore oil and gas industry will be a catalyst for clean growth innovation.
Additional information on the Oil and Gas Industry Recovery Assistance Fund can be found in the backgrounder below.
“I would like to thank the Task Force for its commitment and drive to complete this piece of work with such expediency. Its recommendations will help establish key priorities to maximize employment for Newfoundland and Labrador residents and support the recovery of our province’s oil and gas industry. Husky Energy is the first to receive support under this fund – its project will employ Newfoundlanders and Labradorians by sustaining jobs at the West White Rose project and protecting the option of restarting the project in 2022.”
Honourable Andrew Furey
Premier of Newfoundland and Labrador
“The Oil and Gas Industry Recovery Task Force has offered us creative solutions on how to best utilize the funding provided to us by the Federal Government. The approach taken will help ensure the funding is widely distributed for the utmost benefit to the oil and gas industry in our province. It will not only support direct and indirect employment but also activities that generate environmental benefits and support existing installations in our offshore.”
Honourable Andrew Parsons
Minister of Industry, Energy and Technology
“We are proud of our offshore, and proud of the people who built it. We’ll continue to support workers and invest in their future.”
Honourable Seamus O’Regan
Minister of Natural Resources and MP for St. John’s South-Mount Pearl
“As Co-Chair of the Oil and Gas Recovery Task Force, it is gratifying to reach this milestone and start getting people back to work. With each step in this process we are helping to create jobs and build a stronger offshore industry in our province. ” Bill Fanning, Co-Chair, Oil and Gas Industry Recovery Task Force
“This announcement to support Husky’s West White Rose Project is a great start in the recovery of Newfoundland and Labrador’s oil and gas industry. There will be immediate, positive employment impacts which is the primary driver of this fund. Government and industry worked together and found a solution that will maximize the benefit for the people of this province. We look forward to getting started early 2021 on this important work with Husky, and to more announcements in the weeks to come with a continued focus on our provincial oil and gas recovery.” Karen Winsor, Co-Chair, Oil and Gas Industry Recovery Task Force
“This funding will maintain jobs in 2021 and helps preserve the option to restart West White Rose construction in 2022 as global economic conditions permit.” Jonathan Brown, Senior Vice President, Husky Energy Atlantic Region
Details for the Oil and Gas Industry Recovery Assistance Fund
The Newfoundland and Labrador Offshore Oil and Gas Industry Recovery Assistance Fund is a key tool to fund industry-led activities that will sustain the offshore oil and gas industry in the short-term and drive the recovery of our province’s oil and gas sector over the long term.
The main objectives of the program are to support direct and indirect employment in Newfoundland and Labrador, support activities that generate environmental and co-benefits and support existing installations in our offshore. To achieve these objectives, target areas for investment include:
· Maintenance of existing installations;
· Increase production in the Basin; and,
· Accelerate production.
The $320 million would be accessed through submission of a funding proposal – operators would be required to contribute a minimum of 50 per cent of eligible costs and adhere to parameters around start and end dates for proposed projects. These submissions would be evaluated against the criteria proposed by the Task Force with the funding decision made by government.
Applicants must be companies and organizations with existing oil and gas development and production projects in the Newfoundland and Labrador offshore area. They also must be legal entities validly incorporated or registered in Canada and have an office in the province.
Monitoring CommitteeA Monitoring Committee will work to monitor the performance of the Fund and will be comprised of senior provincial and federal officials whose role is to monitor and report on program expenditures and outcomes including: jobs created or maintained; installations upgraded or maintained; R&D or deployment projects supported; and, environmental benefits produced.
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