Suncor announced Wednesday that the co-owners of the Terra Nova FPSO have finalized an agreement to restructure the project ownership and move forward with the Asset Life Extension Project.

Suncor, Cenovus and Murphy Oil, now control 100% of the project with the following increased ownership positions: Suncor – 48% (previously approximately 38%); Cenovus – 34% (previously 13%); and Murphy Oil – 18% (previously approximately 10%).

The agreement also includes the previously disclosed royalty and financial support from the Government of Newfoundland and Labrador including up to $205 million, on a matching contribution basis, to support local onshore and offshore work related to the Asset Life Extension Project.

The Asset Life Extension Project is expected to extend production life by approximately 10 years, providing an additional 70 million barrels of resource for the partnership and providing many benefits to the Newfoundland and Labrador and Canadian economies in the form of taxes, royalties and employment. The FPSO will undergo maintenance work at the Bull Arm Fabrication site starting early September prior to sailing to dry dock in Ferrol, Spain later this year with a safe return to operations anticipated before the end of 2022.

β€œThe decision to move forward with the Terra Nova project is a concrete example of Suncor’s commitment to invest in projects that have strong economic returns and will provide long-term value for investors. This agreement also provides certainty for the 1,000 plus local direct and indirect jobs that support the project,” said Mark Little, Suncor president and chief executive officer. β€œWe appreciate the deep collaboration and support from the provincial and federal governments, which has been crucial to helping us reach this important milestone.”

Suncor also announced it has entered into a conditional agreement to increase its interest in the White Rose asset subject to a restart decision on the West White Rose project.

As part of the conditional agreement, Cenovus, the operator, will complete a restart evaluation for the West White Rose project by mid 2022. Should the project economics be robust enough to lead to a restart decision, Suncor has agreed to increase its interest in the White Rose offshore field by 12.5% (from 27.5% to approximately 40%) in exchange for a cash payment by Cenovus to Suncor. Suncor would assume capital commitments on the 12.5% additional interest on a go-forward basis only.

No significant capital spend is expected before 2023 and both companies will work together to increase the efficiency of this asset.

The White Rose asset joint venture owners are Cenovus (operator) and Suncor. The West White Rose Project joint venture owners are Cenovus (operator), Suncor and Nalcor.