Cenovus Energy Inc. and its partners have agreed to restart the West White Rose project.

The announcement was made Tuesday morning at the Energy NL conference. First oil from the platform is anticipated in the first half of 2026, with peak production anticipated to reach approximately 80,000 barrels per day (bbls/d), 45,000 bbls/d net to Cenovus, by year-end 2029.

“The joint venture owners have worked together to significantly de-risk this project over the past 16 months. As a result, we’re confident restarting West White Rose provides superior value for our shareholders compared with the option of abandonment and decommissioning,” said Alex Pourbaix, Cenovus President and Chief Executive Officer. “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.”

Cenovus and Suncor, as part of the restructuring, have entered into an agreement whereby Cenovus will decrease its working interest in the White Rose field and satellite extensions while Suncor will take a larger stake, with the approval of the West White Rose project restarting. Cenovus has reduced its stake in the original field to 60% from 72.5% and to 56.375% from 68.875% in the satellite extensions. Nalcor has a 5% working interest in the satellite fields.

Contributing to the decision to restart the project is an amended royalty structure with the Government of Newfoundland and Labrador which provides safeguards to the project’s economics in periods of low commodity prices.

The remaining capital required to achieve first oil is expected to be approximately $2.0 billion to $2.3 billion net to Cenovus. This includes construction costs of approximately $1.6 billion to $1.8 billion net to Cenovus for the completion of the West White Rose full platform, and about $400 million to $500 million net to Cenovus for subsea drilling and completions work and the SeaRose floating production, storage and offloading (FPSO) vessel’s asset life extension. Capital to complete the project is largely offset by deferral of planned decommissioning costs of $1.6 billion to $1.8 billion over the next five years that had been assumed in the business plan presented at Cenovus’s Investor Day in December 2021.

Included in the West White Rose Project capital estimate is $120 million net to Cenovus to be spent in 2022 as the company works towards full restart of the West White Rose Project in 2023. This amount will be added to Cenovus’s 2022 Corporate Guidance at its next update later this year.

In a separate statement, the provincial government said its royalty share is improved in a higher commodity price environment. The province will receive a $200-million Royalty Abandonment credit as well as $100 million to establish a Green Transition Fund. Further details of the fund will be released in the coming weeks.

West White Rose is expected to generate almost $20 billion in gross domestic product and over $7 billion in labour income for the province over the 14-year life of the project. It will create approximately 250 permanent platform jobs, as well as create or maintain up to 1,500 more direct and indirect jobs. Employment will begin to ramp up at the Argentia site immediately and increase through 2023.

The proponents also commit to work with the province and other third parties on advancing natural gas development.

In October 2013, Cenovus (formerly Husky) announced plans to develop West White Rose via a fixed wellhead platform to tie back to the existing SeaRose FPSO. The project was released from Federal Environmental Assessment in September 2013. Originally sanctioned in 2017, major construction work on West White Rose was suspended in March 2020 and a project review was announced in September of that year. As a result of this agreement, and the efforts of the Cenovus and its partners, the project has been re-started.

On April 6, 2022, the Bay du Nord Development Project was released from the Government of Canada’s environmental assessment process. The Bay du Nord project will play a key role in helping the province meet global demand for responsible, lower carbon oil while supporting our government’s commitment to Net Zero by 2050. It is also critical to the Newfoundland and Labrador economy, and will provide significant employment and economic activity.

On Sept. 25, 2020, the Federal Government announced $320 million in funding to be administered by the Province to support direct and indirect employment in the Newfoundland and Labrador oil and gas sector and activities that generate environmental and co-benefits.

This Oil and Gas Industry Recovery Assistance Fund provided $41.5 million in funding (50 per cent of total costs) to maintain near-term jobs and protect the option of re-starting West White Rose.

Discovered in 1984, the White Rose field is located in the Jeanne d’Arc Basin; production commenced in 2005 and utilizes an FPSO vessel. There are two projects in the field: the White Rose Project, in which Cenovus holds a 60 per cent ownership with partner Suncor, which holds 40 per cent; and the White Rose Expansion Project – owned jointly between Cenovus (56.125 per cent), Suncor Energy (38.875 per cent) and Nalcor Energy Oil and Gas Inc. (5 per cent). Cenovus is the operator of both.