Terra Nova oilfield gets overdue break

A costly oil spill nine months ago, recurring gas compression problems, longer-than-anticipated maintenance shutdowns and now the prospect of federal charges.

Given that list of woes the owners of Newfoundland’s Terra Nova oil project needed a shot of good news, which they received from the Canada-Newfoundland and Labrador Offshore Petroleum Board Aug. 8 with word that they can add another 40 million barrels to their production reserves, which are now 410 million barrels.

The regulator approved operator and 34 percent owner Petro-Canada’s plan to bring the Far East fault block on stream, raising output to 140,000 barrels per day from 125,000 bpd, extending Terra Nova’s estimated operating life by four years to 2025.

There is still the potential to add 100 million barrels from the Far East, with two wells spudded this year on the production license — one of them completed in mid-June.

But the seven-company consortium, including ExxonMobil Canada at 22 percent, Norsk Hydro Canada Oil & Gas 15 percent, Husky Energy 12.51 percent and Murphy Oil 12 percent are still reeling from the spill last November that slashed fourth-quarter volumes in half.

The offshore board said July 29 it has completed a detailed investigation of the spill and had turned its findings over to federal prosecutors.

If charges are laid they will likely cover safety, environmental protections and resource management provisions of legislation covering the region.

The operating struggles have continued this year, with gas compression problems keeping output below capacity and forcing the consortium to extend a plant turnaround to 40 days and add another 10 days to improve the reliability of compression and injection facilities.

—Gary Park