Husky brings sparkle to Newfoundland

Husky Energy is providing the one real jolt of hope these days in offshore Newfoundland, piling up drilling success and obtaining regulatory approval for a 40 percent hike in production from its White Rose project.

With other major ventures being slowed by drilling setbacks, or blocked by failed negotiations with the provincial government, Husky is currently leading the way in the region.

It received regulatory and government clearance to hike output at the field to 140,000 barrels per day immediately from the previously authorized 100,000 bpd and is before regulators with an application to tie in production from the South White Rose extension, while evaluating opportunities to develop other newly discovered fields.

Husky is 72.5 percent operator of White Rose, with Petro-Canada holding the balance of 27.5 percent.

It also plans to spend C$290 million this year drilling and completing a seventh production well at White Rose as well as delineating a discovery north of the main White Rose site.

The delineation program last year added possible resources of 138 million barrels to the proven, probable and possible total of 379 million barrels.

It’s all welcome news for the Newfoundland government, with Natural Resources Minister Kathy Dunderdale proclaiming the latest production increase as proof of the “continued growing potential of our offshore.”

She said other increases granted to the Hibernia and Terra Nova projects show all three are “performing well for the benefit of both the operators and the province.”

That was an indirect reference to setbacks on other fronts, with partners in the Chevron-led Hebron-Ben Nevis development abandoning their plans a year ago after the collapse of fiscal negotiations with the Newfoundland government and the government’s decision in January to overrule regulatory approval of an application to add the 223 million barrels of Hibernia South reserves to the core Hibernia project.

In its drive to obtain greater benefits for Newfoundland from the offshore, the province said it wanted more details on the benefits plan and how commercial arrangements would affect royalties and taxes. Operator ExxonMobil is currently reworking that application.

—Gary Park