“It was designed with a 20-year production life and it’s amazing that it’s coming up on 20 years,” Hogan said after addressing delegates at Noia’s conference 40th annual conference on Thursday.
“We need to see what we need to do from an engineering perspective to safely and reliably operate for 10 more years.”
The idea is to line up the decision around upgrades that need to happen in 2020.
“We need to do some work on the mooring chains, which will likely require an off station and we’re trying to line up potential to do some of the asset length extension work in the same time horizon,” Hogan said, noting it was too early to suggest where off station work would occur.
The company says there’s still a lot of resource in the basin — one slide from his presentation suggested upwards of 80 million barrels — but the challenge is accessing it in way that makes economic sense.
Asked if Suncor had the opportunity to increase its ownership at Terra Nova would it do so, he said they’d consider it. It currently has a majority 37.675 per cent stake.
“We always evaluate any opportunity, whether it’s near field development, infield development, commercial opportunities, we’re very value focused.”
In evaluating the opportunity for extension at Terra Nova, Hogan said factors under the company’s control include safety, reliability and low-cost operations. But factors that would require the collaboration of all stakeholders in “a very complex industry locally” would also play a significant part.
“The cost of goods and services; the tax and royalty regimes locally; the local benefit requirements; provincial equity in offshore projects; incentives for exploration; carbon credits,” Hogan said.
“We’ve all got to show up to find the right table to have this dialogue. This is a five-, 10-, 15-year problem, we can’t be so narrow focused on this.”
He said a collaborative approach would be key in the current market and hinted at other markets becoming more attractive.
“You can see a lot of capital flowing south of the border into shale oil, you can even see some going to western Canada and some of the shorter cycle time investments. We need to keep that in the back of our mind as we work on some of our challenges.”
Late this summer, Suncor will be drilling four exploratory wells in Graben and East Flank blocks.