Suncor Energy Inc., Calgary, will record a $425 million (Can.) non-cash after-tax impairment charge in fourth-quarter 2020 on its share of the White Rose asset and West White Rose project in the Jeanne d’Arc basin off Newfoundland and Labrador.
The project operator, Husky Energy Inc., agreed in October 2020 to merge with Cenovus Energy Inc., casting “significant doubt on the future of the project,” Suncor said Jan. 4 (OGJ Online, Oct. 26, 2020). The deal closed Jan. 1.
While the asset is currently producing, the West White Rose project was intended to access 200 million bbl (gross) of light crude oil and extend the life of White Rose field by 14 years. Construction for the project at Argentia and Marystown was suspended in March 2020 and construction workers demobilized due to COVID-19. In a September 2020 update, Husky said the project was 60% complete, but that all major construction remained on hold.
Discussions with the operator and various levels of government to determine the future of the project are ongoing. The Government of Newfoundland and Labrador agreed to provide some support for the West White Rose project in 2021, Suncor said.
The company’s 2021 guidance remains unchanged as White Rose field will remain online producing as expected and Suncor’s guidance did not include any major capital spend on the West White Rose project in 2021.
The White Rose asset joint venture owners are Cenovus (operator, 72.5%,) and Suncor (27.5%). The West White Rose Project joint venture owners are Cenovus (operator, 69%), Suncor (26%) and Nalcor (5%).
