(St. John’s, NL – June 11, 2021) With the Suncor Energy deadline of June 15, 2021 quickly approaching for a decision on the asset life extension (ALE) project or abandonment of the Terra Nova FPSO, Noia has undertaken an analysis of the financial benefits of the Terra Nova project. Noia engaged Jupia Consultants, led by David Campbell a former Chief Economist with the Government of New Brunswick, to model the economic impacts of the asset life extension project and the continued operation of the Terra Nova FPSO for 10 additional years.
The economic impact report by Jupia Consultants uses Statistics Canada data, as well as data available from Budget 2021 such as $64 USD per barrel oil price and an average royalty equivalent to $11 per barrel, and an assumed $350 million capital investment into the asset life extension project in Newfoundland and Labrador. In total, the project has the potential to support over 1,700 jobs and $138 million in wages during the asset life extension project stage and almost 3,400 jobs and $139 million in wages annually during its ten years of operation in Newfoundland and Labrador. Further, under the base case scenario of $11/barrel for royalties, the provincial and municipal governments would receive a total of $1.49B over 10 years, including $880M in royalties, $120M in corporate income taxes, and $485M in other taxes.
“As we get into the final hours available for the parties involved to find a resolution that puts the Terra Nova FPSO back into production, the financial impacts of this project must be considered. We understand it has already provided billions of dollars in revenue and taxes to the Government of Newfoundland and Labrador and our economic impact report demonstrates that a billion dollars more remains available. Together with the employment this project brings – employment with above average wages – the skills and expertise in the industry that will be retained, and the message it will send the global industry, we believe there is an overwhelming business case to be made for all parties, including operators and the Government of Newfoundland and Labrador, to make this deal happen. Let’s save the Terra Nova FPSO and work on building back a dynamic and prosperous industry.”
- Charlene Johnson, Noia CEO
Jupia Consultants Inc. was founded in 2004. The firm specializes in economic impact assessments, assets mapping, community marketing and sector development strategies. The firm’s two primary consultants have over 30 years of combined experience working with economic development agencies, government departments, industry associations and corporate clients across Canada.
The economic impact report for the Terra Nova project can be found here.
The Newfoundland and Labrador Oil and Gas Industries Association (Noia) was founded in 1977 to represent the supply and service sector of the offshore oil and gas industry. Today, Noia represents approximately 460 member organizations worldwide which are involved in, or benefit from, the oil and gas industry of Newfoundland and Labrador. Noia members are a diverse representation of businesses that range from offshore supply boats and helicopters, health and safety equipment and training, engineering solutions and fabricators to law firms and human resource agencies.
Ken Morrissey, Senior Advisor Communications, Research and Policy
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