High risk of Covid-19 infection in crowded places has led Husky Energy to suspend construction of a C$2.2 billion ($1.6 billion) expansion at its White Rose ocean oil production site, 350 kilometers offshore of Newfoundland.
Husky called the time-out after the Canada-Newfoundland Offshore Petroleum Board (CNOPB) issued an order for industry to pare crews down to essential personnel for the duration of the pandemic.
About 600 construction workers were packed into the remote site on the Grand Banks of Newfoundland. The next scheduled stage in the West White Rose Project called for the offshore labor force to grow to 1,400 in April.
The CNOPB order followed a warning by Trades NL, a coalition of 16 Newfoundland construction unions, that the main defense against the coronavirus, social distancing, is impractical when offshore projects concentrate big crews in small spaces.
With the pandemic still in early stages in Canada, Husky did not announce new dates to replace the original West White Rose targets. Production was set to begin in 2022, with peak capacity of 75,000 b/d in 2025. Operating costs are forecast to be less than C$3/bbl ($2.25/bbl).
The Calgary-based producer earlier this month reduced capital expenditures for 2020 by about 33% to C$900 million. Investments in resource plays and conventional heavy oil projects in Western Canada have been halted, with a focus on optimizing existing production and lowering costs. Drilling of sustaining pads at all thermal operations also was suspended.