Husky Energy president and CEO Robert Peabody speaks to reporters following the company’s annual meeting in Calgary, Alta., Friday, May 5, 2017. Calgary-based Husky Energy Inc. has budgeted between $2.9 billion and $3.1 billion for capital projects in 2018. THE CANADIAN PRESS/Jeff McIntosh

Husky offshore oil vessel SeaRose suspended after close call with iceberg

Oil-related operations on the SeaRose FPSO vessel off the Newfoundland and Labrador coast have been ordered suspended by a federal-provincial regulator in response to a close call with an iceberg it had last March.

The Canada-Newfoundland and Labrador Offshore Petroleum Board said Wednesday the vessel operated by Husky Oil Operations Ltd., a division of Husky Energy Inc. (TSX:HSE) of Calgary, will remain suspended from operating until it is sure that “corrective and appropriate actions” have taken place to address its ice management procedures and other organizational issues.

“While this is to be initiated immediately, it will require a few days to complete,” noted petroleum board spokeswoman Lesley Rideout.

C-NLOPB said the floating production, storage and off-loading vessel was operating with 84 people and upwards of 340,000 barrels of crude onboard in the White Rose field, 350 kilometres east of St. John’s, when an iceberg entered its 0.25-nautical-mile ice exclusion area.

“The SeaRose FPSO should have disconnected and sailed away from the threatening iceberg,” it said in a statement. “That action was not taken and personnel were at one point instructed to muster and ‘brace for impact.”’

No impact occurred, it said.

“We have approved off-loading of the current inventory as this is safer than keeping it onboard,” Rideout added.

In a statement, Husky said it will comply with the order.

“We could have and should have responded differently according to the pre-existing plan, and we will learn from this incident. We will work with the C-NLOPB and take the actions necessary to satisfy the regulator,” said CEO Rob Peabody.

The company said a number of measures have already been put in place to further improve ice management operations. It said the SeaRose FPSO is currently producing about 27,000 barrels of oil per day net to Husky, which owns about 70 per cent of the production.

The SeaRose is expected to play a key role in the new $5.2-billion West White Rose offshore project sanctioned by Husky and its partners, Suncor Energy Inc. (TSX:SU) and provincial Crown corporation Nalcor Energy, last spring.

First oil is expected in 2022 and the project is expected to reach peak output of about 75,000 barrels per day in 2025, using a fixed platform tied back to the SeaRose.

The SeaRose FPSO began operations in 2005 with first commercial production from the White Rose field.

The regulator said the vessel’s operations are to be suspended in a safe, controlled and environmentally prudent manner while maintaining the integrity of the installation, adding its decision is based on preliminary results from an inquiry held last year.

The board said it is taking no action against drilling operations involving the mobile offshore drilling unit Henry Goodrich, also operated by Husky, as it has demonstrated acceptable adherence to ice management in the past.

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