Today, Suncor announced that the co-owners of the Terra Nova Floating, Production, Storage, and Offloading (FPSO) facility and associated Terra Nova Field have finalized the agreement to restructure the project ownership. Accordingly, they will now move forward with the Asset Life Extension Project.
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The other co-owners are Cenovus and Murphy Oil, who, joint with Suncor, will now control 100% of the project. Specifically, the increased ownership positions are Suncor 48% (previously approximately 38%); Cenovus 34% (previously 13%); and Murphy Oil 18% (previously about 10%).
More about the agreement
According to Suncor, the agreement also includes the royalty and financial support from the Government of Newfoundland and Labrador; thus, including up to $205 million to support local onshore and offshore work related to the Asset Life Extension Project.
In fact, the three co-owners expect the Asset Life Extension to extend production life by approximately ten years. Additionally, the companies shared it could provide an additional 70 million barrels of resource for the partnership.
Moreover, this extension project could end up providing many benefits to the Newfoundland and Labrador, and Canadian economies. Hence, new taxes, royalties, and employment could result from this project.
Per the announcement, the companies also said the FPSO will undergo maintenance work at the Bull Arm Fabrication site starting early September. In fact, these activities will be implemented prior to sailing to the dry dock in Ferrol, Spain, later this year. Suncor and the other co-owners anticipate a safe return to operations before the end of 2022.
Reception at Suncor
In this sense, Mark Little, Suncor president, and chief executive officer, commented; “The decision to move forward with the Terra Nova project is a concrete example of Suncor’s commitment to invest in projects that have strong economic returns.”
Similarly, Little noted that this type of project could “provide long-term value for investors. This agreement also provides certainty for the 1,000 plus local direct and indirect jobs that support the project.”
Lastly, Suncor CEO concluded; “We appreciate the deep collaboration and support from the provincial and federal governments; which has been crucial to helping us reach this important milestone.”
