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Suncor Energy’s Terra Nova Floating Production Storage and Offloading (FPSO) vessel is expected to resume oil production off the coast of Newfoundland and Labrador in the second quarter of 2023 after completing repairs on its subsea production system.
The Terra Nova oil field, located about 350 kilometers southeast of St. John’s, had been producing oil since 2002 until it was forced to shut down in December 2019 due to a crack in the FPSO’s hull. After the hull was repaired, Suncor announced in September 2020 that it was suspending operations at the oil field to conduct a review of the project’s economics and seek financial support from the Newfoundland and Labrador government.
Following the review, Suncor said in April 2021 that it had reached a framework agreement with the government of Newfoundland and Labrador and its partners in the Terra Nova project to extend the life of the oil field. The agreement would involve a $500-million investment from the province, which would own an 8.5% stake in the project, and a commitment from Suncor and its partners to extend the life of the oil field by about a decade.
As part of the agreement, Suncor also committed to repairing the subsea production system, which had been a major source of issues for the Terra Nova project. The subsea production system comprises a series of pipes and equipment on the ocean floor that collects oil from the wells and transports it to the FPSO for processing and storage.
The FPSO has a storage capacity of about 960,000 barrels of oil and can produce up to 100,000 barrels per day. Its return to production is expected to generate significant economic benefits for Newfoundland and Labrador, including jobs, royalties, and tax revenues.
The Terra Nova project is owned by a consortium if companies. Suncor, Cenovus, and Murphy Oil, control 100% of the project with the following increased ownership positions: Suncor – 48% (previously approximately 38%); Cenovus – 34% (previously 13%); and Murphy Oil – 18% (previously approximately 10%).
The project has faced several challenges over the years, including declining production, higher costs, and a drop in oil prices. In 2019, the project’s partners said they needed to find ways to reduce costs and increase production in order to extend the life of the oil field.
The repair of the subsea production system is seen as a major milestone for the Terra Nova project, as it is expected to improve production and reduce costs. The repair work involved replacing several components of the system, including flowlines, umbilicals, and control systems, and was carried out by Subsea 7, a global engineering and construction company.
Suncor said in a statement that the repair work was completed in June 2022 and that the FPSO was expected to return to the oil field in the second quarter of 2023 to resume production. The company said it would take about six months to ramp up production to full capacity.
The return of the Terra Nova FPSO is expected to provide a much-needed boost to the Newfoundland and Labrador economy, which has been hit hard by the COVID-19 pandemic and the decline in oil prices. The province has been seeking to diversify its economy and reduce its reliance on oil and gas revenues, but the Terra Nova project is still seen as an important source of income and jobs.
The Newfoundland and Labrador government said in a statement that it was pleased with the agreement reached with Suncor and its partners and that it would continue to work with them to ensure the success of the project.
“The extension of the life of the Terra Nova oil field is a critical investment in Newfoundland and Labrador’s offshore oil and gas industry and in our province’s economic future,” said Premier Andrew Furey. “It will provide significant benefits for our people, including jobs, revenue, and opportunities for local companies. We look forward to working with Suncor and its partners to ensure that the project is successful and that it benefits all Newfoundlanders and Labradorians.”
The Terra Nova project is just one of many oil and gas projects in Newfoundland and Labrador’s offshore waters, which have been a key source of income and jobs for the province for several decades. The province is home to several large oil fields, including Hibernia, Hebron, and White Rose, as well as several other smaller fields.
However, the future of the province’s offshore oil and gas industry is uncertain, as the world shifts towards renewable energy and countries take action to reduce their greenhouse gas emissions. Many companies are also facing pressure from investors and activists to reduce their reliance on fossil fuels and invest more in cleaner sources of energy.
Despite these challenges, Suncor and its partners in the Terra Nova project are optimistic about the future of the oil field and the province’s offshore industry. They say that the project’s extension will provide a much-needed boost to the industry and help to secure jobs and economic benefits for the province for many years to come.
The repair and return of Suncor’s Terra Nova FPSO vessel to the oil field off the coast of Newfoundland and Labrador is a significant development for the province’s offshore oil and gas industry. The repair of the subsea production system is a major milestone for the Terra Nova project, and its return to production is expected to generate significant economic benefits for the province, including jobs, royalties, and tax revenues. While the future of the province’s offshore industry is uncertain, the extension of the Terra Nova project is a welcome development for the province and its people, and a sign that there is still life in the offshore oil and gas industry in Newfoundland and Labrador.
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