Another shock wave has hit the Newfoundland and Labrador oil industry, with Husky Energy announcing Wednesday that it will carry out a review of the massive West White Rose extension project, which was suspended in March due to the COVID-19 pandemic.
The decision throws a major project in the province’s offshore industry into limbo, as it involves thousands of construction, production and supply jobs, as well as billions of dollars in revenue for the provincial government.
In addition, the Calgary-based oil major, which operates the White Rose oilfield in offshore Newfoundland, will also review “future operations” in Atlantic Canada.
“A full review of scope, schedule and cost of this project is critical, given the minimum one-year delay to first oil caused by COVID-19, and our priority of maintaining the strength of our balance sheet with ample liquidity,” Husky CEO Rob Peabody said in a news release Wednesday morning.
“Unfortunately, the delay caused by COVID-19 and continued market uncertainty leaves us no choice but to undertake a full review of the project and, by extension, our future operations in Atlantic Canada.”
It’s a further blow to an industry that forms the backbone of the province’s fragile economy and has already endured repeated setbacks, including several thousand job losses since the COVID-19 pandemic upended the worldwide economy earlier this year.
Citing pandemic financial pressures, Husky’s senior vice-president for the Atlantic region said cancelling the White Rose extension is on the table.
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