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Will offshore Husky East Coast leak step up demand for Alberta crude?

Don Horne   


Underwater surveys began on Monday after an oil spill off Canada’s Atlantic coast as Husky Energy Inc and government agencies assessed a leak that temporarily shut down all crude production in the waters of Newfoundland & Labrador.

A leaking flowline from Husky’s White Rose Field to the SeaRose storage vessel was detected on Friday, when Husky was restarting production after suspending operations a day earlier due to stormy weather, according to Reuters.

The spill involved 250 cubic meters (1,572 barrels) of oil, Husky spokeswoman Colleen McConnell said on Monday. She said the company is monitoring the area for oil sheens and any impact on wildlife.

The leak forced Husky’s White Rose to shut down, along with all other producing oil projects in the area until the regulator, Canada-Newfoundland & Labrador Offshore Petroleum Board, determines it is safe to resume, the board said in a statement on Sunday.


Along with White Rose, there are three other producing projects off the shore of Newfoundland – Exxon Mobil Corp’s Hebron and Hibernia fields, and the Suncor Energy Inc-operated Terra Nova.

Exxon Mobil told Reuters on Monday it had “safely resumed production” at Hebron, while its larger Hibernia field has not yet restarted. It said it shut in production at the two fields prior to the Husky incident.

The combined output of Canada’s Atlantic projects is 280,000 barrels per day, a volume that is unlikely to affect oil markets significantly, with global storage levels high and a likely quick return to production, Mark Oberstoetter, director of upstream Canada for consultancy Wood Mackenzie, told Reuters.

Environmental groups said that while government and industry officials have said they can protect oceans from the risks of an offshore spill, the reality is more complicated.

“This is the inevitable nightmare scenario where extreme weather is making it impossible to determine how much oil has been spilled, much less try to clean it up,” Keith Stewart, senior energy strategist with Greenpeace Canada, told Reuters.

There were no injuries to oil workers during the storm, one of the worst in decades, the Newfoundland & Labrador regulator said on Sunday. A spokeswoman for the regulator did not respond to Reuters’ requests for comment on Monday.



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