Canada-based Husky Energy has launched a review of its West White Rose Project offshore Newfoundland and Labrador, citing the prevailing Covid-19 pandemic and prolonged market uncertainty.
Slated to begin production in 2022, the project has been suspended since March due to the outbreak.
According to Husky Energy, the review comes in the wake of the ongoing suspension of major construction activities on the project.
The company also said that the decision was taken as it was reprioritising its capital due to the downturn of the global economy.
The West White Rose Project is currently 60% complete.
However, all major construction work continues to be on hold while Husky Energy will seek to determine a direction for the future, considering a start-up delay of more than 12 months due to a small ‘offshore weather window’.
Husky Energy CEO Rob Peabody said: “A full review of scope, schedule and cost of this project is critical, given the minimum one-year delay to first oil caused by Covid-19, and our priority of maintaining the strength of our balance sheet with ample liquidity.
“Unfortunately, the delay caused by Covid-19 and continued market uncertainty leaves us no choice but to undertake a full review of the project and, by extension, our future operations in Atlantic Canada.”
The West White Rose project is part of the White Rose Expansion project, which involves the development of three satellite fields, namely the North Amethyst, the West White Rose, and the South White Rose.
The development plan for all three satellite fields includes a subsea tie-back to the existing SeaRose floating production, storage, and offloading (FPSO) vessel.
Peabody added: “This is a very difficult decision for us. We know thousands of Canadian families depend economically on these well-paid construction, contract and operational jobs, and that these are not easily replaced.
“We fully appreciate that this project represents billions in government taxes and other anticipated public benefits. Without it, these will not materialise.”
In June 2015, Husky Energy started oil production from the South White Rose project.