Cenovus Energy Inc., Calgary, agreed restart the West White Rose project offshore Newfoundland and Labrador. First oil from the platform is anticipated in first-half 2026, with peak production expected to reach about 80,000 b/d by yearend 2029, the company said May 31.
“With the project about 65% complete, combined with the work done over the past 16 months to firm up cost estimates and rework the project plan, we are confident in our decision to restart this project in 2023,” said Alex Pourbaix, Cenovus president and chief executive officer. The decision follows project and includes a finalized agreement with the government on a royalty framework that provides safeguards to the project's economics in periods of low commodity prices, the company said.
The restart decision builds on a late 2021 deal between Cenovus and Suncor Energy Inc., Calgary, to restructure working interests in White Rose and Terra Nova fields (OGJ Online, Sept. 9, 2021). Cenovus reduced its stake in the original field to 60% from 72.5% and to 56.375% from 68.875% in the satellite extensions.
Cenovus will make a cash payment of $50 million (Can.) to Suncor, while Suncor’s interest in the White Rose asset increases to 40% from 27.5%, and in the West White Rose project to 38.6% from 26.1%.
A review of the West White Rose project was announced in September 2020 by then-operator Husky Energy Inc. prior to its acquisition by Cenovus (OGJ Online, Oct. 26, 2020). Construction activities had been suspended in March 2020 due to the COVID-19 pandemic and the global economic downturn.
The West White Rose project is expected to access 200 million bbl of light crude oil and extend the life of White Rose oil field by 14 years.
Go-forward capital spend
Capital required to achieve first oil is expected to be $2-2.3 billion (Can.) net to Cenovus, which includes construction costs of $1.6-1.8 billion (Can.) net to Cenovus for completion of the West White Rose full platform, and about $400-500 million (Can.) net to Cenovus for subsea drilling and completions work and the SeaRose FPSO vessel’s asset life extension.
Capital to complete the project is largely offset by deferral of planned decommissioning costs of $1.6-1.8 billion over the next 5 years that had been assumed in the business plan presented to Cenovus investors in December 2021.
Included in the West White Rose Project capital estimate is $120 million (Can.) net to Cenovus to be spent in 2022 as the company works towards full restart of the West White Rose project in 2023. The amount will be added to Cenovus’s 2022 guidance later this year.
Cenovus is operator of the White Rose asset joint venture with Suncor. Cenovus is operator at West White Rose with partners Suncor and Nalcor.