Suncor May Look To Decommission Aging Terra Nova FPSO

Expressions of interest released by the operator include everything from abandonment to life extension.

The idled Terra Nova FPSO at Bull Arm in Trinity Bay, Newfoundland.

Suncor Energy is preparing for all contingencies when in comes to the fate of the Terra Nova FPSO. The operator recently issued Expressions of Interest (EOI) related to the FPSO, including two that prepare for decommissioning of the vessel and the field, while another provides an update to a previous EOI preparing for remediation of the FPSO to support the asset life-extension project. The move has the Newfoundland and Labrador Oil & Gas Industries Association (NOIA) concerned about the future of the vessel and the field.

“NOIA members and our Board of Directors are deeply concerned for the future of the Terra Nova Project and the far-reaching impacts decommissioning and abandonment would have upon our industry, the people who work in it, and our province,” said Charlene Johnson, chief executive of NOIA. “I understand the deadline to reach a deal on the Terra Nova Project was extended to April 30—which has now passed—and NOIA is encouraging all parties to reach an agreement as quickly as possible.”

The Terra Nova field has produced approximately 425 million barrels of oil with the asset life-extension project expected to capture another 80 million. However, oil and gas has not flowed from the field in over a year. For months, the FPSO has been moored dockside at the Bull Arm fabrication site in Trinity Bay as Suncor and its field partners struggle to find the best path forward for the project.

Suncor’s EOIs seek proposals from companies who could do wellbore abandonment for the 30 wells tied to the Terra Nova FPSO, 11 other exploration and delineation wells, and carry out decommissioning of the vessel.

According to Suncor documents, the FPSO could be decommissioned later this year, and subsea abandonment work, which would require a drilling rig and various marine support vessels, could begin in the fall of 2022.

On 14 January 2021, the Government of Newfoundland and Labrador announced a nonbinding Memorandum of Understanding had been reached with Suncor and the other project owners in order to strengthen the economics of extending the life of the project. The province also committed up to $175 million on a matching contribution basis and possibly modifying the royalty regime should an agreement be reached. The commitment was based on an agreement for long-term production via the Terra Nova Project.

“Truthfully, I find it hard to even speak of decommissioning,” added Johnson. “With the potential of our offshore, including the potential for an additional 80 million barrels from the Terra Nova field, these are not conversations I expect or want to have.”

It hasn’t been smooth sailing for the project in recent years. In December 2019, the Canada-Newfoundland and Labrador Offshore Petroleum Board issued an order to suspend production-related operations on the FPSO after finding Suncor noncompliant with required safety inspections. Six months later, a fire broke out onboard the vessel but was extinguished. No injuries were reported.

Terra Nova is operated by Suncor Energy, which holds a 37.675% interest in the project. Partners include ExxonMobil at 19%; Equinor at 15%; Husky Energy (Cenovus) at 13%; Murphy Oil at 10.475%; Mosbacher Operating at 3.85%; and Chevron Canada at 1%.

The Terra Nova field is located 350 km southeast of Newfoundland and Labrador. Discovered in 1984, the field was the second to be developed on the Grand Banks offshore Newfoundland. It began production in 2002.