The Provincial Government today provided an update on the status of the Terra Nova Project (the Project). To provide the necessary assurances to the owners as they continue to evaluate the Project, the province and the project owners have agreed to a non-binding Memorandum of Understanding (MOU).

In order to strengthen the economics of the Project and to support its continued operation, the Provincial Government has made a financial commitment of up to $175 million on a matching contribution basis from the federally-funded Newfoundland and Labrador Offshore Oil and Gas Industry Recovery Assistance Program, should a formal agreement be reached. The province has also agreed to modify the royalty regime for the Terra Nova Project pending a formal agreement.

The province’s offer is contingent on a commitment to restart operations and finalize a plan for long-term production. Depending on the outcome of Project owner discussions, the Provincial Government may reduce, amend, or rescind its offer for financial contribution and/or royalty relief. These financial contributions also remain subject to a formal agreement being reached by all parties to the MOU, which expires on March 31, 2021.

Terra Nova, discovered in 1984, was the second oilfield to be developed on the Grand Banks; production started in 2002. Suncor holds a 37.675 per cent ownership in the Terra Nova project and is the project operator. The remaining project partners are; ExxonMobil Canada Properties (19 per cent); Equinor Canada Ltd. (15 per cent); Husky Energy, a subsidiary of Cenovus Energy (13 per cent); Murphy Oil Company Ltd. (10.475 per cent); Mosbacher Operating Ltd. (3.85 per cent); and, Chevron Canada Resources (1 per cent).

On September 25, 2020, the Federal Government announced $320 million to be administered by the province to support direct and indirect employment in the Newfoundland and Labrador oil and gas sector and activities that generate environmental or co-benefits. The Oil and Gas Industry Recovery Task Force, established by Premier Furey, was asked to develop recommendations on eligibility parameters and priority criteria for the Fund.

The Fund includes three target areas: maintenance of existing installations; increasing productivity in the basin; and accelerating investment. Key evaluation criteria for eligible proposals include employment impacts; amount of applicant contribution; environmental benefits, and sustainability.

A total of $288 million has been allocated for operators of existing offshore installations with the remaining $32 million allocated for projects to support the local oil and gas service and supply community.

To date, the West White Rose and Hibernia projects have received support under the fund, with a total of $79.5 million committed to date.

The $32 million in funding for the local service and supply community will be allocated to approved applicants in response to a government issued, time-limited Call for Proposals which was issued on January 7, 2021.

The agreement between the Government of Canada and the Government of Newfoundland and Labrador will work to re-affirm Newfoundland and Labrador’s commitment to achieve net zero carbon emissions.

Quotes
“We have committed to explore every avenue possible to ensure long term sustainability of the oil and gas industry and its workers, and we will continue to do that. This MOU reflects a commitment by the Terra Nova owners to continue discussions on establishing a viable path forward for the Project. With this financial commitment on the table, we are hopeful that together we will see a future for Terra Nova and its workers.”
Honourable Andrew Furey
Premier of Newfoundland and Labrador

“This MOU among parties is not a formal legal agreement and its purpose is to provide the necessary assurances and allow the time for the project owners to develop and select a Project concept. We will continue to support Terra Nova and the industry as they progress their evaluation and we remain optimistic that a feasible solution can be found to ensure the continued operation of the Terra Nova project.”
Honourable Andrew Parsons
Minister of Industry, Energy and Technology

“For almost two decades, the Terra Nova Project has played a pivotal role in the Newfoundland and Labrador offshore energy industry, supporting the local workforce and supply community. With today’s announcement we have greater certainty and clarity as we develop the path forward for Terra Nova and we are optimistic regarding the future of the project.”
Josée Tremblay
Vice President, East Coast, Suncor

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Media contacts
Meghan McCabe
Office of the Premier
709-729-3960
meghanmccabe@gov.nl.ca

Lisa Lawlor
Industry, Energy and Technology
709-729-5777, 631-8155
lisalawlor@gov.nl.ca

Media contact – Suncor
T: 1-833-296-4570
email: media@suncor.com