Updated: Agreement reached to save Terra Nova offshore oil and gas field in Newfoundland

UPDATE: As reported by CBC News on June 16 in “New hope for Terra Nova as Suncor announces tentative deal to save N.L. oilfield” , and by a Unifor press release, an agreement in principle has been reached to restructure ownership of the Terra Nova oil fields, offering a path forward which may save the jobs of the workers. Details are not yet available, but Suncor will increase its equity stake and previous owners may participate in the new structure, contingent on the province honouring its commitment to provide $205 million from the oil industry recovery fund, and some $300 million in royalty relief .

Workers demonstrated outside the Newfoundland legislature on June 14 and 15 , as politicians debated inside about the fate of the Terra Nova oil field and an ultimatum from Suncor Energy, asking for the government to buy the assets of the Terra Nova FPSO, an offshore production and storage platform which employed nearly 1,000 workers in 2019, which is the last time oil was produced. Suncor is the last company remaining in the consortium which owned the oil field.  The complexity of the situation is described in several CBC articles, including:  “Talks to save Terra Nova oilfield collapse after N.L. government rules out equity stake” (June 10), and  “As deadline for Terra Nova approaches, pressure mounts to save troubled oilfield” (June 11). To date, the government has refused to buy the asset, saying that the risks are too great because the oilfield is estimated to be 85% depleted. Instead, it has agreed to provide about $500 million in cash and incentives to the company.  As of June 16, Suncor Energy has still not announced a decision, as reported by CBC in “Terra Nova deadline comes — and goes — without word of its fate” .

Unifor Local 2121 represents the workers at Terra Nova, and organized the demonstrations at the legislature.   Unifor describes the rally here, and in this press release asserts that the Terra Nova decision is a harbinger of the future of the Newfoundland oil and gas industry.

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