Canada Commits Nearly $240 Mln to Aid Offshore Oil Industry

By Rod Nickel

September 25, 2020

© Stephen / Adobe Stock

© Stephen / Adobe Stock

Canada will spend C$320 million ($238.56 million) to support its offshore oil industry, which has struggled as coronavirus pandemic travel restrictions reduced demand, Natural Resources Minister Seamus O’Regan said on Friday.

O’Regan said in St. John’s, Newfoundland and Labrador, that the funds are intended to support jobs, and could be used for maintenance, upgrades and environmental services.

The money falls short of requests from the industry, which included a government stake in a major project, tax credits and investment incentives.

Newfoundland and Labrador is the third-largest oil-producing province in Canada, producing 5% of the country’s crude in 2018. Low oil prices have forced producers to cut spending and output globally.

The province, whose economy depends on oil, its fishery and tourism, has the country’s highest unemployment rate.

Husky Energy said this month it would review its West White Rose offshore Newfoundland project, following the suspension of major construction because of the pandemic.

Husky has asked the federal and provincial governments to buy a stake in the project.

Newfoundland and Labrador has four offshore developments, owned by groups of owners, including Exxon Mobil Corp, Chevron Corp, Suncor Energy, Husky Energy and Equinor.

($1 = 1.3414 Canadian dollars)

(Reporting by Rod Nickel; Editing by Chris Reese and Aurora Ellis)