Interview with Charlene Johnson, CEO, Energy NL
Energy NL CEO Charlene Johnson
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 since 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 recently, they’re cautiously optimistic, and that’s a good sign. I know they’re working very closely with the supply chain and 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. So, that is a critical project for us. If it proceeds, the GDP contribution to the province will be over $80 billion. 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.
Fig. 1. In theory, Bay du Nord should be the next major development project offshore NL. Map: Equinor.
One very exciting thing that happened recently was in the provincial budget. The provincial government reinvested in an exploration incentive to attract companies to explore offshore Newfoundland and Labrador. This is a $90 million fund and while the parameters and specifics aren’t announced yet, this will certainly help toward the cost of drilling a well, which is quite expensive offshore. 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, Mark Carney, who has talked about a pipeline from west to east within Canada. He has talked about a one-window stop for assessments for projects and about consulting again with the industry on the emissions cap. And he talked about developing more conventional oil. So, we’re anxious to meeting with members of the new government. 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 hydroelectric development and potential onshore 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 for our members and 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 have said publicly. Decision Gate Two is scheduled for December, and assuming they get to FID in 2027, it will be about five years to complete construction and put all the infrastructure in place for first oil. However, the project has been 12 years of getting to this point. It takes a long time, from the time of discovery to the time of production in Canada, and that’s why we want to see those timelines for environmental assessment to improve. This particular project was in the environmental assessment phase for four years.
Fig. 4. Hebron was NL’s fourth major project, completed in 2017. Image: ExxonMobil Canada.
WO: How are the existing producing fields faring at the moment?
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 exploration rigs. We’re not exactly sure why at this time, but possibly there will be some well work there. And the Sea Rose FPSO (Fig. 7) returned to White Rose field in recent months, and production resumed in March. So, with the current projects, things are going very 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.
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 would 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.
So, ideally in 2027, we will see more exploration. That’s the idea of the provincial 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 work forward two years, it will be helpful. We also have a bid round coming up in November 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 federal 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.
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.
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 at Energy NL to make sure the production cap isn’t in place. We have been telling the past Liberals, and we’ll tell the current Liberals 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 that is 30% below the global average for emissions at extraction and is undertaken with world-leading ESG practices.
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 and we do not require pipelines. Our oil gets sold, last time I checked, into 14 different countries around the world, but it can also be a solution for our internal 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 spinoffs 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 and Labradorians work in Alberta. But it’s a lot of work to remind folks that we have an offshore industry 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 upcoming 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 John Hogan) as of this past weekend (May 3), as well. So, you know, the next key piece now for this project is getting the 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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