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CALGARY – Cenovus Energy Inc.’s West White Rose project has arrived. Off the coast of Newfoundland has reached a major milestone with the completion of the refit of a massive vessel that will operate in an expanded offshore oil field.
Calgary-based Cenovus provided an update Thursday on progress on the West White Rose project, which it said is on schedule and about 85 per cent complete.
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West White Rose is a multi-billion-dollar extension of the existing offshore White Rose oil field, of which Cenovus is the operator and majority owner. Its joint venture partners are Suncor Energy Inc. and OilCo Newfoundland and Labrador.
The project is expected to add 14 years of production life to the White Rose field, which began oil production in 2005.
It includes the construction of a fixed concrete drilling platform that will be connected to the existing infrastructure of the oil field. The company targets 2026 to start oil production from the new drilling platform, and peak production is expected to reach about 80,000 barrels per day by the end of 2029.
But Cenovus CEO John McKenzie said the project – which was first approved in 2017 but was paused in 2020 due to the pandemic and the collapse in oil prices – had already reached a key milestone with the completion of planned maintenance work on the SeaRose floating production. . Storage and unloading vessel.
The ship, which has been operating off the coast of Newfoundland since 2005, will be linked to the new offshore drilling rig West White Rose but needs major refits before that can happen.
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SeaRose was sent to Belfast, Ireland, for upgrades, and spent nearly three months in drydock there while the work was completed, McKenzie told analysts on a conference call.
He added that the ship is now on its way back to Canadian waters.
“Currently, the SeaRose is on its way to site, and we expect it to arrive in the next couple of days,” McKenzie said, adding that it would then take 30 to 45 days to reconnect the vessel to the White Rose production system.
“Most importantly…we now have the vessel ready for the West White Rose project, which essentially enables this vessel to produce and receive production for an additional 14 to 15 years from today.”
The refit of SeaRose was completed by shipbuilder Harland & Wolff, listed on the London Stock Exchange.
In a press release last fall after it was awarded the SeaRose contract, Harland & Wolff put the value of the renovation project at £61 million.
The West White Rose project is part of Cenovus’ growth plan aimed at achieving increased production in order to enhance long-term shareholder returns, McKenzie said on Thursday.
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The company is also working on the construction of a 17-kilometre pipeline connecting the Lake Narrows oil sands reservoir to the main processing facility at Christina Lake, a project expected to generate additional production of up to 30,000 barrels per day from the site starting in late 2025. .
Cenovus Energy reported Thursday that it earned $820 million, or 42 cents per diluted share, for the quarter ended Sept. 30, down from $1.86 billion, or 97 cents per diluted share, a year earlier.
Total revenue for the quarter was $14.25 billion, down from $14.58 billion in the same quarter last year.
Total upstream production in the quarter was 771,300 barrels of oil equivalent per day, down from 797,000 barrels a year earlier.
Total downstream production reached 642,900 barrels per day compared to 664,300 barrels in the same quarter last year.
On an adjusted basis, Cenovus says its cash flow was $1.05 per diluted share in the fourth quarter, down from adjusted funds flow of $1.81 per diluted share in the prior year.
This report by The Canadian Press was first published Oct. 31, 2024.
Companies in this story: (TSX:CVE)
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