Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.The Cenovus Christina Lake oilsands facility steam-assisted gravity drainage pad southeast of Fort McMurray, Alta., is shown on Wednesday, April 24, 2024. THE CANADIAN PRESS/Amber Bracken

CALGARY - Cenovus Energy Inc.'s West White Rose project off the coast of Newfoundland has reached a major milestone with the completed refurbishment of the massive vessel that will operate in the expanded offshore oilfield.

The Calgary-based Cenovus provided an update Thursday on the progress of its West White Rose project, which it said is on schedule and about 85 per cent complete.

West White Rose is a multi-billion-dollar extension of the existing White Rose offshore oilfield, of which Cenovus is the operator and majority owner. Its joint venture partners are Suncor Energy Inc. and OilCo Newfoundland and Labrador.

The project is expected to add 14 years of production life to the White Rose field, which began producing oil in 2005.

It involves the construction of a fixed concrete drilling rig that will be tied into the oilfield's existing infrastructure. The company has been targeting 2026 for the start of oil production from the new drilling platform, with peak production expected to reach approximately 80,000 barrels per day by year-end 2029.

But Cenovus CEO Jon McKenzie said the project — which was first sanctioned in 2017 but temporarily halted in 2020 due to the pandemic and a collapse in oil prices — has already reached a major milestone with the completion of planned maintenance work on the SeaRose floating production, storage and offloading vessel.

The ship, which has been operating off the coast of Newfoundland since 2005, will be linked to the new West White Rose offshore drilling platform but needed significant refurbishments before that could happen.

McKenzie told analysts on a conference call that the SeaRose was sent to Belfast, Ireland for the upgrades, and has spent approximately three months in dry-dock there while the work was completed.

He said the vessel is now on its way back to Canadian waters.

"Currently, the SeaRose is en route to the site, and we expect it to arrive in the next couple of days," McKenzie said, adding it will then take 30 to 45 days to reconnect the vessel to the White Rose production system.

"Importantly ... we now have the vessel ready for the West White Rose project, which basically enables this vessel to produce and receive production for an additional 14 to 15 years from today."

The refurbishment of the SeaRose was completed by ship fabricator Harland & Wolff, which is listed on the London Stock Exchange.

In a news release last fall after being awarded the SeaRose contract, Harland & Wolff pegged the value of the refurbishment project at £61 million.

The West White Rose project is part of Cenovus' growth plan aimed at delivering increased production in order to enhance shareholder returns for the long-term, McKenzie said Thursday.

The company is also working on constructing a 17-kilometre pipeline connecting its Narrows Lake oilsands reservoir to its Christina Lake main processing facility, a project that is expected to result in up to 30,000 barrels per day of additional production from the site starting in late 2025.

Cenovus Energy reported Thursday that it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.

Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.

Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.

Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.

On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.

This report by The Canadian Press was first published Oct. 31, 2024.

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