27 July 2018

Bay du Nord and Equity #nlpoli

In a staged political event Thursday that was woefully short of basic details,  the provincial government and Equinor announced they will proceed with development of the Bay du Nord field in the Orphan Basin.  The news release for the event referred to a framework agreement only.

Bay du Nord is located approximately 500 kilometres east of St. John's,  in between 1.0 and 1.2 kilometres of water.  Equinor and its partner Husky Canada believe the field contains at least 300 million barrels of light crude.

The project will cost $6.8 billion to bring into production using a floating production storage and offloading vessel similar in concept to the FPSOs used for Terra Nova (1996)  and White Rose (2002).  The provincial government acquired 10% equity in the project in addition to royalties under the Offshore Oil  Royalty Regulations (2017).  The provincial government will therefore pay $90 million initially as well as $680 million during the construction phase.

Project sanction is expected in 2020 with first oil in 2025.

The following table shows a comparison of Terra Nova,  White Rose, and Bay du Nord, with all dollar amounts in 2018 dollars.

03 July 2018

Electricity prices, risk, and what the editors didn't say #nlpoli


What Muskrat Falls will do to electricity prices is not funny.

Never was.

But what *is* extremely funny are columns like Russell Wangersky's latest hand-wringer about the most recent round of electricity rates hikes.
Remember when we were told that Muskrat Falls was needed to stabilise electricity rates? 
Now, it’s pretty clear that it is destabilising them —- in a frightening fashion.
Let's review some information that has been in the public domain since the beginning of the project.  Russell has clearly either forgotten or chosen not to remember details because none of this stuff is new.

SRBP. "Fear and loathing on the energy campaign trail" from November 2010.

Note the date.