Terra Nova Encounters Difficulties During Re-Start

Petro-Canada resumed oil production from the Terra Nova FPSO on December 18. Today, Petro Canada observed an irregularity in the produced water quality and immediately took action to shut in that part of the system. Approximately two barrels of oil were discharged. Petro-Canada immediately notified the Coast Guard and the Canada Newfoundland Offshore Petroleum Board.

Consistent with its plans for resuming production in an environmentally responsible manner, production was started with wells that have no water content. This was followed by start up of gas compression and injection systems. Once production was stabilized, wells that contained some water were brought on line. The produced water system was operating normally, but routine sampling indicated produced water quality was beginning to deteriorate. The produced water system was immediately shut in, and an investigation of the problem is underway. Until the investigation is concluded, production will be limited to wells that contain no water with rates of 90,000-100,000 barrels per day.

"Petro-Canada's top priority is safe and environmentally responsible operations," said Gordon Carrick, Vice-President, East Coast with Petro-Canada. Oil spill cleanup equipment is available offshore, and is ready for deployment as soon as weather conditions allow.