The C-NOPB Chief Conservation Officer (CCO) announced today that the suspension order put in place because of the spill from the Terra Nova FPSO has been lifted. The lifting of the suspension order is subject to the mitigation plan submitted by Petro-Canada on November 27, 2004 as well as a number of conditions on the lifting of the suspension put in place by the CCO.

“On the basis of an extensive examination over the past 10 days, we believe the primary causes for the spill have been identified and measures have been put in place to ensure, within the acceptable risk parameters, there will be no recurrence,” stated CCO Wayne Chipman.

“From an environmental perspective, there is no longer a compelling reason to continue with the production suspension as long as each corrective action identified by Petro-Canada in their investigation report to us is completed by the target date and Petro-Canada complies fully with the conditions that I have outlined.”

The decision to issue a suspension order and the decision to lift the order is based on the authority of the Chief Conservation Officer. It cannot be over-ruled by the Board.

The CCO recognizes there is ongoing interest for additional information surrounding the lifting of the suspension and the Board’s perspective on the factors surrounding the spill, but because of the ongoing investigation, no further information about the suspension, the mitigating measures or the CCO conditions can be released.

At the same time, the C-NOPB has given a 60-day extension to the Terra Nova Production Operations Authorization (POA) with a condition that the FPSO may not resume hydrocarbon production until certain outstanding maintenance work on safety systems is complete.

In order for any oil and gas activity to go ahead in the Newfoundland & Labrador offshore area, permission, in the form of authorizations, must be given by the C-NOPB.

“Terra Nova’s POA, which is essentially the authorization for the FPSO to conduct work, was due to expire at the end of August, 2004. A Safety Audit by the Board in June 2004 indicated there was a maintenance backlog at the FPSO,” explained C-NOPB acting Chair and CEO, Fred Way.

There were discussions with Petro-Canada on the results of the audit and the importance placed on clearing the backlog. It became clear the Board would not issue a new 3-year POA until this issue had been addressed in a meaningful way.

“At its meeting of August 16, the Board decided to not approve Petro-Canada’s application for a 3 year POA but to give a 90 day extension with specific work requirements. At that time we believed Petro-Canada was trying to address the issues raised by the audit so we wanted to give them some time – 90 days in fact – to refocus their efforts on addressing the outstanding maintenance issues.”

While significant progress on the outstanding issues has been made at the end of the 90-day extension, a number of issues remain incomplete. In September, the Board conducted an additional safety audit. We also requested Lloyds Registry, the FPSO certifying authority to do a special audit. While both audits raised issues, the Lloyds audit did confirm the integrity of the facility for safe operations.

However, as an extra measure of safety and environmental protection, the Board requires that no production take place until the required maintenance is done.

During this period, Petro-Canada will be permitted to bring additional people onboard the FPSO to focus on this issue,” Mr. Way said. “In that way, we can be confident that the FPSO will continue to meet the high standard of safety we have set.”

Petro-Canada has recognized there are a number of items outstanding and have indicated their commitment to addressing these maintenance items. C-NOPB Safety Officers and Conservation Officers will continue to monitor the situation closely.

Backgrounder – Production Operations Authorization (POA)

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