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China National Offshore Oil Corporation (CNOOC) is postponing this year’s planned drilling campaign offshore Canada’s east coast because of the coronavirus pandemic, the Chinese state-held oil firm told CBC News on Tuesday.
“We have concluded that given that we are in the early stages of our exploration program, we cannot safely execute offshore in Atlantic Canada in the near term due to the COVID-19 pandemic,” the company said in a statement to the outlet.
CNOOC was planning to begin this year an exploration drilling campaign in the Flemish Pass Basin offshore Newfoundland and Labrador, but it will be delaying the drilling because of the pandemic, said the Chinese firm, which didn’t cite the oil price crash as a reason for the delay.
Earlier this month, Husky Energy and Norway’s Equinor deferred their joint Bay du Nord project offshore Newfoundland and Labrador, citing the collapse in oil prices.
“Equinor and partner Husky Energy have decided to defer the Bay du Nord development project offshore Canada to make the project more robust for low commodity prices,” a spokesman for Equinor told Reuters two weeks ago.
During the project hiatus, Equinor will work to improve the economics of the project and assess how long the delay would be, the Norwegian company told Reuters.
The Chinese firm, CNOOC, received in December last year the green light to begin exploration drilling at the proposed CNOOC International Flemish Pass Exploration Drilling Project.
“The decision was made following a thorough and science-based environmental assessment process concluding that the project is not likely to cause significant adverse environmental effects when mitigation measures are taken into account,” Impact Assessment Agency of Canada said in December.
“We know how important the offshore is for the future of Newfoundland & Labrador. These exploration projects create good jobs, while ensuring the environment continues to be protected at the highest level,” Canada’s Minister of Natural Resources Seamus O’Regan said three months ago.
Now with oil prices at their lowest level in nearly two decades and oil demand plunging, companies are not rushing to drill, especially in the coronavirus pandemic.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.
We have to start depending on Canada for what we need which means that shareholders might have to pick Canada first and their off shore accounts second.