There are immediate implications for Newfoundland and Labrador from a major shakeup in the Canadian oil sector, with Husky Energy confirming construction on the stalled West White Rose extension project will not resume in 2021.

The decision follows news on Sunday that Husky is being purchased by rival Cenovus Energy in an all-stock, $3.8-billion deal between the two Calgary-based businesses, with the transaction expected to be finalized early next year.

“The 2021 construction season has been cancelled,” a Husky official confirmed in a statement to CBC News.

The decision means the future of the troubled extension project for the White Rose oil field in offshore Newfoundland is murkier than ever.

In an additional statement Monday, Husky said once the sale by Cenovus is complete, there will be additional work to review all assets.

“Regarding Husky’s Newfoundland and Labrador operations, the WWR [West White Rose] project is key to extending the life of the White Rose field,” the statement reads. “As we have said before, all options are on the table and accelerating abandonment remains a possibility.”

Cenovus directed media inquiries to its investors call on Sunday.

In a brief statement Monday, the Newfoundland and Labrador Oil and Gas Industries Association said it “remains optimistic about the future of the offshore operations of Husky Energy, including the West White Rose project.”

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