SeaRose shut down after Husky reprimanded for iceberg close call

The board that regulates activity in the oilfields off Newfoundland and Labradorhas suspended operations for Husky Energy'sSeaRose FPSO because of how it handled an incident with a too-close iceberg last March.

"[The SeaRose FPSO] should have disconnected andmoved into safe space, awayfrom the iceberg. They did not do that," says Scott Tessier, chair and CEO of the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).

"At one point, the 84 crew on board were ordered to muster and brace for impact," he added.

There were also about 340,000 barrels of crude oil onboard at the time of the incident on March 29, 2017, according to a media advisory issued by the C-NLOPB late Wednesday afternoon.

The icebergcame within 463 metres of the SeaRose, within an ice exclusion zone.It did not hit the SeaRoseand there were no injuries, environmental damage or damage to the facility.

'Lacks full confidence'

This is the first time since 2004 that theC-NLOPBhas suspended operations in the offshore.

The boardsaid the suspension is happening now almost 10 months after the incident because of the preliminary report findings, which are:

• Husky did not follow its Ice Management Plan (IMP).
• Onshore senior management did not ensure the IMP was followed.
• The offshore manager failed to disconnect, as per the IMP.

"Thosefindingshave given the board cause for concern and lack ofconfidencethat the operatorwill adhere to its emergency response plans," Tessier said.

We could have and should have responded differently ... we will learn from this incident.- Rob Peabody, CEO Husky Energy

In a statement late Wednesday afternoon, Huskysaid it is taking steps to suspend work at the SeaRoseFPSO.

"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.

"A number of measures have already been put in place to further improve ice management operations.The safety of personnel and the protection of the environment remains Husky's number one priority."

'Ball is in their court'

The suspension will remain in place until "corrective" actions are taken by Husky, the regulator said.

"It reallydependson the operator's responsethe ball is in their court," Tessier added.

"The operator needs to come in and convince us that they take these findings seriously and to rebuild ourconfidencethat they are capable of safe andenvironmentally-responsibleoperations."

SeaRoseFPSOis afloating production, storage and offloadingvessel located in theWhite Roseoil and gas field, approximately 350 kilometres east of St. John's.

At the time of the incident, Husky said specific measures were takento ensure the SeaRose wasn't damaged.

That includedshutting in, or reducing, production atthe facility and flushing the flowlines with seawater. Steps were also taken to ensure the SeaRose could disconnect in minimal time, if required.

The province's Natural Resources Minister Siobhan Coadysaid in her own statement that she hopes the issue is resolved prudently and in a timely manner.

"The shutdown may result in short term deferral of royalty revenue; however this revenue will be recovered in future as the oil is produced," said Coady.

Husky said the SeaRosewas producing roughly 27,000 barrels of oil a day prior to the suspension order.