N.L.'s $505 million aid for oilfield a sign of strength, not a precedent: Minister

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06/21/2021
Terra Nova
Terra Nova oilfield

Newfoundland and Labrador's energy minister says the $505 million in cash and royalty adjustments the province offered to the owners of the Terra Nova oilfield represents a line in the sand and not a precedent for other oil companies to ask for money.

Andrew Parsons told reporters today that he's thrilled the owners of Terra Nova reached an agreement in principle Wednesday night that will see it continue--at least until the fall--rather than shut it down entirely.

Premier Andrew Furey told reporters his government faced "massive'' pressure to buy an equity stake in the Terra Nova field, and he's proud of Parsons for standing his ground and refusing.

Instead, the province has offered the partners a break in royalties worth $300 million as well as $205 million in cash, which comes from a $320 million federal fund given to the province last fall to boost its floundering oil sector.

By contrast, the province in December gave Cenovus Energy, formerly Husky Energy, $41.5 million from the same pot to keep its stalled West White Rose oilfield extension project running for another year, at which point a decision about its future will be made.

Terra Nova minority owner Suncor Energy announced Wednesday night that instead of abandoning the oilfield, its partners would restructure their shares and supply short-term funding until a decision about next steps is made in the fall.