Energy NL CEO Charlene Johnson
Interview with Charlene Johnson, CEO, Energy NL
During the Offshore Technology Conference in Houston, in early May, World Oil Editor-in-Chief Kurt Abraham sat down with Energy NL CEO Charlene Johnson to get her views on issues affecting Newfoundland & Labrador’s (NL’s) offshore oil and gas sector. While the situation overall remains positive for further development, there are some uncertainties complicating the picture.
World Oil (WO): How would you describe the current state of NL’s offshore oil and gas sector?
Charlene Johnson (CJ): I think we’re at an exciting time. [The potential] Bay du Nord [development], as you know, has been around. The field (Fig. 1) was first discovered in 2013, and we understand that decision gate two will be happening in December of this year. So, we’re all anxiously awaiting that.
As the Canadian head of Equinor said the other day, they’re cautiously optimistic, and that’s a good sign. I know they’re working very closely with the supply chain. They just recently held some sessions with us to give our members an update, and they plan on having more detailed supplier development sessions in the fall, where there will be an opportunity for B2B meetings and so on. So, that is a critical project for us. If it proceeds to the GDP of the province, it’s an over $80 billion benefit to the economy. It will be a lot of work for supply chain members and thousands of jobs. And it also will stimulate more interest in our offshore, because when you have a strong economy, that breeds a stronger economy. So, you’ll get a lot more attention on what’s happening in Newfoundland Labrador.
Fig. 1. In theory, Bay du Nord should be the next major development project offshore NL. Map: Equinor.
In terms of tie-backs, we’re not hearing a lot. There are still some plans in the works, but they’re further down the road. One very exciting thing that happened recently was in the provincial budget. The province brought in an exploration incentive to attract companies to come here and explore. So, the bidding round will be in November. This is a $90 million fund. The parameters and specifics aren’t announced yet, but, this will certainly help toward the cost of drilling a well, which is quite expensive offshore. But at the same time, we’re still working on our advocacy with the federal government to eliminate the emissions cap, which we see as a production cap. It’s very difficult for a company to spend $150 million, $200 million to explore a well, and then another $10 billion to 12 billion to build the infrastructure and not know if you’re going to get your return on investment, if there’s a production cap in place.
Fig. 2. The concrete gravity structure (CGS) for the West White Rose project has been towed out of the graving yard seen here and is set to be towed to the field site in June. Image: Cenovus.
On the one hand, we have the province bringing in initiatives to attract investment. And on the other hand, we’ve had years of uncertainty. I think this is the best word to use for the federal government in terms of deterring investment. We have a new prime minister now, as you know, and his cabinet has gone into place. But I think generally during the election, both major parties were saying the right things. Prime Minister Mark Carney talked about a pipeline from west to east. He talked about a one window stop for assessments for projects. He talked about consulting again with the industry on the emissions cap. And he talked about developing more conventional oil. So, we’re anxious to get in and have those meetings as soon as they’re settled in their new roles. I think we’re at a time when things can go really well, and that’s on the oil side of things. And then we have Churchill Falls wind and hydrogen projects. Some of them are still being advanced, so a lot of good things are happening.
WO: The West White Rose development is the province’s current leading offshore project. How is that progressing?
Fig. 3. The topsides are being transported from the United States, and it will be mated to the CGS to create this final facility at the field site. Image: Cenovus.
CJ: My understanding is that the platform facility at the Port of Argentia is being floated out late this week (editor’s note: it was floated out on May 9). I believe that Cenovus expects to tow the CGS (Fig. 2) to the field site in June. The topsides are coming up from the United States, and it will be mated to the CGS in the near future, Fig. 3. We should see first oil in 2026. Again, it’s a very critical project to our members and to our province for royalties and activity. So, that’s definitely an exciting one, for sure.
WO: You made reference to the next potential project, Bay du Nord, which is still officially on hold after the last delay was announced a couple of years ago. And now, Equinor is saying that first oil might not be until 2031. Is that your understanding?
CJ: Yes. That’s what they said. They get decision gate two in December, and assuming they get to FID, it will be about five to six years to get all of the construction done and put all the infrastructure in place for first oil, for which six years isn’t bad. It’s the 12 years of getting to this point. It takes a long time, from the time of discovery to the time of production. It’s so long in Canada, and that’s why we want to see those timelines for environmental assessment come down. This particular project was in the environmental assessment phase for four years.
WO: How are the existing producing fields faring at the moment?
Fig. 4. Hebron was NL’s fourth major project, completed in 2017. Image: ExxonMobil Canada.
CJ: Everything is moving along and doing well. That’s my understanding for Hibernia and Hebron (Fig. 4). Hibernia (Fig. 5) is the gift that keeps on giving as our first project. And for our second project, Terra Nova (Fig. 6), they had an expression of interest out for rigs, so we’re not exactly sure why, but possibly there will be some well work there. Hopefully, there is some future potential to maximize the recovery of the resource. And the Sea Rose FPSO (Fig. 7) returned to White Rose field in recent months, and production resumed there in March. So, with the current projects, things are going very well.
WO: You made reference to some special exploration funding. What are the prospects for additional exploration, this year and next?
CJ: I don’t think we’ll see any exploration this summer. I know we won’t, because that expression of interest in our queue would have had to have been out long before now. And I would say it’s going to be very difficult to see exploration in 2026, which I’d have to get this number concretely for you. But anecdotally, I heard the other day that this will be the first time in 19 years that we haven’t had a rig exploring for oil offshore, when everywhere else in the world is proceeding quite well.
Fig. 5. The venerable Hibernia platform was NL’s first major offshore project and is still producing, more than 27 years after going online in November 1997. Image: Hibernia Management and Development Company Ltd.
So, ideally in 2027, we will see more exploration. That’s the idea of this fund, to speed it up and encourage the drilling of more wells, because some of these companies have until 2029 to drill under their current licenses. If we can even bring that forward two years, it will be helpful. We also have a bid round coming up in November. It will be interesting to see how that goes. Over our last four years, three of them have seen zero bids. One was around $200 million. Yet, in the previous years, there was a period over six years, when we had $4 billion in bids. So, the slowdown coincided with when the emissions cap was first talked about in 2021. And it has really deterred investment. There are other things, too, but regarding that emissions cap, certainly the message we got from industry is we need to get that sorted.
WO: Your country, as we alluded to earlier, just got through having a national election, in which Prime Minister Mark Carney and the Liberals won control. How is that going to affect Newfoundland & Labrador’s offshore sector over the next couple of years?
CJ: Well, as I said, we’ll continue our advocacy to make sure the production cap isn’t in place. We have been telling the past Liberals, and we’ll tell the current Liberals, both of which may comprise many of the ministers. We’ll see, once the cabinet is put in place. But a lot of people (in the federal regime) are the same people from the previous government. We’ll continue to tell our story that, as long as the world needs oil, which those numbers are ever rising, that it should come from a place where it’s a lighter, sweeter crude. ESG is top of mind. Rule of law, all those things we have going in our favor.
Fig. 6. The Terra Nova FPSO returned to the field site in late-summer 2023 after undergoing a life extension project. It resumed production in November 2023. Image: Suncor Energy, Inc.
So, it’s continuing with the awareness, continuing with the education about the product that we have, how it isn’t tied to a pipeline. We’re at tidewater. We don’t need pipelines. Our oil gets sold, last time I checked, into 14 different countries around the world, but it can also be a solution for energy security. That’s become a big topic recently, and I think the oil that we have offshore can be a solution to providing more oil to Canada and to the world, too.
We’re already hearing things from Prime Minister Carney about developing more of our own oil. Canada brings in over $20 billion of oil every year, so why not develop reserves within Canada and that creates economic spioffs and also energy security. So, I’m pleased to hear that. When I go to Ottawa and talk about oil, the minds and the thinking of officials go automatically to Alberta and Saskatchewan, and we definitely support that—a lot of Newfoundlanders work in Alberta. But it’s a lot of work to remind folks that we have an offshore industry here in Canada, too. We might be smaller, but it’s a pretty significant part of the economy of Newfoundland and Labrador. So, we’ve got to continue with that advocacy.
Fig. 7. The Sea Rose FPSO returned to White Rose field after a re-fit and resumed production during March 2025. Image: Cenovus Energy.
WO: Meanwhile, the wait continues for Bay du Nord’s fate
CJ: Yes, we’ll be anxiously waiting for Equinor’s decision in December. It’s gate two, so they still have to make their FID in 2027. But this is a big milestone in December.
WO: So, one way or another we’ll know something in December.
CJ: Yes, and the provincial government now has a new leader (Premier Joh Hogan) as of this past weekend (May 3), as well. So, you know, the next key piece now for this project is getting their local benefits agreement worked out with the government. The new premier has put his cabinet in place, and Equinor has to continue those discussions. And we advocate for local content, so that would be the next big thing. And then, hopefully, we’ll get past the board of directors at Equinor.
WO: And December will be here before you know it.
CJ: It will. Maybe an early Christmas present!
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