Canada's Husky Energy has decided to suspend construction activities on its West White Rose offshore project, citing the COVID-19 virus fears.
The oil company sanctioned the West White Rose development in May 2017. The field is being developed via a fixed wellhead platform consisting of topsides supported by a concrete gravity structure, tied to the Sea Rose FPSO Canada's Atlantic Ocean.
Per Husky's fourth-quarter report released in February 2020, the project had been 57% complete at the end of 4Q 2019, with the first oil planned for around the end of 2022.
As with many oil projects in today's low oil price environment, the timeline will now be revised.
Husky Energy said earlier this week it would start a systematic and orderly suspension of major construction activities related to the West White Rose Project.
"The decision reinforces Husky’s objective to prevent the transmission of the COVID-19 virus among its employees, contractors, and the community. The Company carefully assessed the risks and determined they could not be adequately mitigated for such a large construction workforce," Husky said.
Prior to the decision to stop the West White Rose works, and prior to the recent budget cuts, the oil company had budgeted $1,075 - $1,150 million in Atlantic for 2020, primarily for the construction of the West White Rose Project.
“We are taking the steps necessary to keep our people and our construction sites safe,” said CEO Rob Peabody. “These are the right decisions for our people, their families, and the community.”
The company said that it was working cooperatively with its contractors to safely suspend all activities and to demobilize and secure its construction sites.
Production from the White Rose field and its satellite extensions, located 350 kilometers off the coast of Newfoundland and Labrador, is continuing with enhanced workforce control measures introduced to ensure the ongoing safe operations on the SeaRose floating production, storage and offloading vessel, the company added.
Elsewhere in Canada, Norway's Equinor, with Husky as a partner, last week pulled brakes on the plan to develop the Bay du Nord project.
"Equinor and partner Husky Energy have decided to defer the Bay du Nord development project offshore Canada to make the project more robust for low commodity prices," an Equinor spokesperson told Reuters.
Equinor had expected that an investment decision would be made in 2021, with the first oil in 2025.
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