E-mails show N.L. government officials were already preparing for Suncor and Husky Energy to walk away from projects that would keep their respective oil fields operating for years to come
As the COVID-19 pandemic sent oil prices plummeting to historic lows, e-mails obtained by The Canadian Press show Newfoundland and Labrador was quietly bracing for two of its offshore oil fields to be abandoned by their owners.
Before the pandemic hit in early 2020, shutting down any of the four oil fields pumping off the province’s east coast was a distant consideration. But by May of 2020, e-mails obtained through access to information legislation show government officials were already preparing for Suncorand Husky Energy to walk away from projects that would keep their respective oil fields – Terra Nova and White Rose – operating for years to come.
Energy Minister Andrew Parsons told media in October of 2020 that estimating the decommissioning costs taxpayers would have to swallow was “premature, given the current status of our offshore projects.” But presentation notes from a month earlier said the province would owe Suncor a royalty refund of about $157-million, due in 2025, if Terra Nova shut down.
Cenovus got $41.5-million in December 2020 to keep work going on a project that would extend the life of White Rose, while in June 2021 Suncor was given $205-million in direct cash and the province took a royalty cut worth $300-million to keep work going on Terra Nova. “I think that often, a business that’s on the receiving end of the subsidies, when they’re threatening to walk away, it feels like they’re holding the cards. But in reality, they want the subsidy,” Mabee said. “And they normally don’t want to walk away from long-term investments.”
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