The Canadian government vowed Wednesday to attempt to salvage a mothballed C$2.2 billion ($1.6 billion) oil project offshore Newfoundland that the coronavirus pandemic threatens to sink.

AECO Sept 9

Rescue talks are underway, said Natural Resources Minister Seamus O’Regan, after Husky Energy Inc. teamed up with business and labor supporters to broadcast a group call for help for West White Rose, which is 350 kilometers (210 miles) offshore St. John’s.

“A full review of scope, schedule and cost of this project is critical, given the minimum one-year delay to first oil caused by Covid-19, and our priority of maintaining the strength of our balance sheet with ample liquidity,” said Husky CEO Rob Peabody. “Unfortunately, the delay caused by Covid-19 and continued market uncertainty...