SeaRose spill costing province $70M in deferred revenue — so far

The SeaRose FPSO still isn't fully operational, and Newfoundland and Labrador officials confirmed Thursday the ongoing delay has so far cost the province $70 million in royalties.

"The oil is still in the ground," Finance Minister Tom Osborne told reporters at the House of Assembly Thursday. 

"I would have preferred to have gotten it in this year's budget obviously," he said. "But ... we will get the revenue at some point."

The deferred money will be added as a deficit in this year's budget, but Osborne would not say what services or projects, if any, might be affected. "You want me to release the budget today, and I can't do that," he joked with a reporter.

He said the ministry forecasts oil income for both production amounts and price, both of which fluctuate. He added that the price of oil is slightly higher than what officials predicted in this year's budget, so the province can expect more income there to make up for the production loss.

Weather preventing startup

Natural Resources Minister Siobhan Coady said nobody can tell how long it will be before the SeaRose starts pumping oil at full capacity.

Husky Energy, which operates the SeaRose, requires four full days of clear weather in order to complete the logistical requirements to resume production on five of its six wells still lying dormant.

As of Jan. 30, only one of its six drill wells is up and running, while Husky awaits weather conditions to allow them to do the work needed.

The rig operator reported last January that the SeaRose was producing approximately 27,000 barrels of oil per day.

Husky was forced to shut down production after back-to-back spills in November caused by a failed flowline valve.

That leak sent 250,000 litres of crude into the Atlantic, which formed a slick the size of Fogo Island, according to documents recently obtained by CBC News.

The investigation into the spills, led by the provincial offshore regulator, the federal environment ministry and the Canadian Coast Guard, is also on hold until the weather clears, Coady confirmed.

"At this point, I cannot tell you when the investigation will conclude," Coady said. "The flowline must be retrieved. That'll give investigators a lot more information."

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