Last Thursday has to go down as one of those milestone days in the history of the offshore oil industry development in our province. It will in the future, I believe, be recognized in much the same light as the Hibernia discovery, the day the Hibernia structure began its famous journey from Bull Arm and the day first oil was produced on the Grand Banks.
Sure, it might not seem like as big a deal at a quick glance. Let’s be honest, we have sort of become, of late, familiar with megaproject announcements, multibillion-dollar developments and multi-thousands of years of employment.
So the announcement of a mere $2 billion in additional royalties, taxes and equity returns, 350 construction jobs, 2,800 person years of construction employment and 250 full-time platform jobs might not get the blood pumping quite like Hibernia did in those dark days after the closure of the northern cod fishery.
But make no mistake about it: it is a big deal.
It is a big deal not so much actually for the direct and immediate benefit that the various news releases, media reports and political statements relay.
No, it is a big deal because it moves us beyond the one-off construction project approach that has been characteristic of our oil industry development thus far.
It is a big deal in large part because of the way in which Husky Energy and its partners have decided to proceed at the construction site.
It is a big deal since it confirms the value of the decision made years ago by the government to insist on being equity partners in the development of our oil industry.
And it is a big deal because it clearly demonstrates how tenacity, focus, understanding your strengths and downright dogged determination can pay off in the end — and here I am referring as much to the leadership of the Argentia Management Authority as I am to the government.
The decision, arrived at through the negotiation process, to move from a sub-sea tieback expansion of the field to the gravity base structure ensures access to more recoverable oil.
This is, of course, good for the companies, but also ensures a greater return for the people of Newfoundland and Labrador from our hydrocarbon resources.
But what really makes this deal different is the lasting benefit of the gated graving dock. The Hibernia platform was, and the Hebron-Ben Nevis platform is, built using a berm to provide dry-docking. Upon completion of construction, the dry dock-enabling berm is removed and with it the ability to provide on-going graving dock capacity.
The Argentia approach opens the gate (pardon the pun) to continued use, perhaps for more construction of similar structures for the oil industry, as has been alluded to.
Equally importantly, since the Argentia Management Authority will own the graving dock, it may be used for other large marine construction projects that currently cannot be carried out anywhere else in Atlantic Canada and, for that matter, not many places in northeast North America.
This development, once you get past the 10-digit dollar figure, represents a maturing of the oil industry in this province. It represents a confidence on the part of the industry in doing business here and a strong indication, in the form of a gated graving dock, that this is but one piece in a much bigger picture.
At some point in the future, there will undoubtedly come a time where, out of necessity, desire or both, we will wean ourselves from hydro-carbon consumption.
In the interim, and even in the absence of oil, last Thursday’s announcement puts infrastructure in place that will provide lasting benefits to the people surrounding Argentia specifically, and Newfoundlanders and Labradorians generally.
Trevor Taylor is a former cabinet minister under the Danny Williams administration. Email: email@example.com.