TradesNL says PC government 'delivered' on local benefits for Bay du Nord

A prominent labour organization in Newfoundland and Labrador that was pushing hard for topsides construction contracts on the Bay du Nord production vessel says a plan to invest in a massive floating dry dock will more than offset the loss of any work on the topsides.

“This is a pivotal moment for Newfoundland and Labrador, and generational from a work perspective,” said Bob Fiander, executive director with TradesNL, an umbrella organization representing more than a dozen building trades unions.

Fiander was reacting to Tuesday's announcement that a benefits agreement had been reached between the provincial government and the two oil companies behind the massive Bay du Nord offshore oil project.

The agreement will see more than $6 billion in direct revenues flow into the province's treasury over a 25-year period from royalties and corporate taxes, if Equinor and BP make good on a plan to begin producing oil at the Bay du Nord field by 2031.

But in a creative twist that helped get the agreement across the finish line, and win the support of TradesNL, the oil companies agreed to a pay for a $200-million fabrication fund that will be used to help build a massive floating dry dock at the Bull Arm fabrication facility in Trinity Bay.

The dry dock will be owned by the province's oil company, OilCo.

The money is compensation from the oil companies for refusing to guarantee that topside modules for the Bay du Nord production vessel will be constructed in the province, as was demanded by TradesNL.

Local companies can still bid on topsides contracts, but Equinor says it will only award the work to companies that meet cost and schedule timelines for the project, and officials say that countries in Asia have a competitive advantage.

Local construction became a key issue during last fall's provincial election, when TradesNL endorsed Tony Wakeham and the PC campaign, with both sides forming a united front to lobby hard for local construction of Bay du Nord topsides.

The PCs went on the win the election and form a majority.

When it became clear that Equinor would not guarantee local topsides construction, Wakeham said the idea of building a dry dock surfaced, and all sides agreed on the approach.

"We switched focus to create long-term permanent jobs," said Wakeham.

"The $200 million kind of links to what could have been if we were to guarantee [topsides construction],” said Tore Loseth, Equinor's manager in Canada.

Fiander called it a good trade-off.