Canada commits $238m to support offshore oil industry

28 September 2020 (Last Updated September 28th, 2020 12:24)

The Government of Canada has committed C$320m ($238.6m) to support the struggling offshore oil industry.

Canada commits $238m to support offshore oil industry
In Canada, Newfoundland and Labrador is the third-largest oil-producing province. Credit: Wonita & Troy Janzen from Pixabay.

The Government of Canada has committed C$320m ($238.6m) to support the struggling offshore oil industry.

The investment will support jobs and help in funding maintenance and upgrade works, as well as environmental services, Reuters reported citing Canadian Natural Resources Minister Seamus O’Regan.

The latest move comes after weak oil prices forced crude producers to trim expenditures and output.

According to the news agency, the funding falls short of requests from the offshore industry, which include a government stake in a major project, investment incentives, and tax credits.

The latest funding is ‘a good starting point’, according to Newfoundland and Labrador Oil & Gas Industries Association chair Karen Winsor.

Unifor Local 2121 president Dave Mercer said that the aid may help companies ‘rehire’ laid-off workers.

In Canada, Newfoundland and Labrador is the third-largest oil-producing province. The province produced about 5% of the country’s crude in 2018.

The economy of the province is dependent on oil, fishery and tourism.

Earlier this month, Husky Energy launched a review of its West White Rose Project offshore Newfoundland and Labrador, citing the prevailing Covid-19 pandemic and prolonged market uncertainty.

Newfoundland and Labrador province comprises four offshore developments, owned by ExxonMobil, Suncor Energy, Husky Energy Chevron and Equinor.

In July last year, the Hibernia platform offshore Newfoundland spilt an estimated 12,000l of oil into the North Atlantic Ocean.