Husky Oil Operations Limited - conviction information for 2024-02-28
| Corporation name: | Husky Oil Operations Limited |
|---|---|
| Address: | PO BOX 6525 |
| City: | Calgary |
| Province/territory: | Alberta |
| Postal code: | T2P 1H5 |
| Country: | Canada |
| Sector or industry: | 211 - Oil and gas extraction |
| Location of offense: | Offshore, NL – White Rose Oil Field – SeaRose FPSO (82325), St. John's, Newfoundland and Labrador |
|---|---|
| Case summary: |
The SeaRose Floating Production Storage and Offloading (FPSO) facility is located in the White Rose Oil Field in the Jeanne d’Arc Basin, about 350 km east of St. John’s, Newfoundland and Labrador (NL), within Canada’s Exclusive Economic Zone and Canadian Fisheries waters. The FPSO is a ship-shaped production unit that processes, stores, and offloads crude oil. It connects to subsea systems consisting of risers, flowlines, wells, and control systems for oil and gas extraction and fluid injection. At the time of the incident, Husky Oil Operations Limited (HOOL) owned and operated the FPSO. On December 30, 2021, HOOL amalgamated with Cenovus to form Cenovus Energy Inc. The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) leads spill investigations related to offshore oil production for offshore NL. It initiated the investigation and oversaw HOOL’s response. Environment and Climate Change Canada (ECCC) Enforcement Branch conducted a parallel investigation from August 15, 2019, to January 28, 2020, interviewing 39 witnesses. Findings from both investigations form the Agreed Statement of Facts. On November 15, 2018, a severe storm struck the White Rose Oil Field. Production was halted to disconnect the FPSO from subsea systems due to risks posed by the Henry Goodrich rig, which had lost an anchor chain. On November 16, HOOL began hot oiling procedures to warm subsea flowlines before introducing reservoir fluids. These flowlines, spanning kilometers, connect five drill centers in closed loops, linked to the FPSO by two risers. Flowlines include weak links designed to separate under excess tension. At 09:59 that day, a weak link near the South White Rose Extension Drill Center (SWRX) separated during routine operations, releasing crude oil into the Atlantic which resulted in a pressure drop. After 20 minutes without recovery, troubleshooting began. The team suspected fluid displacement or a large gas pocket as the cause. The support vessel MV Atlantic Hawk was dispatched to check for anomalies. None were found at the Southern Drill Center, so the search expanded to SWRX and North Amethyst Drill Centers. A second pumping attempt caused pressure to rise briefly before plateauing, prompting HOOL to activate its Non-Standard Operations protocol. Later that day, MV Atlantic Hawk reported oil on the sea surface. HOOL confirmed a release of approximately 250,000 litres of crude oil. Due to storm conditions, efforts focused on wildlife monitoring rather than containment or recovery. Crude oil is deleterious to fish and harmful to migratory birds, and the release occurred in waters frequented by both. Recovery of affected wildlife offshore was challenging. Between November 18 and 23, 17 potentially oiled birds were observed; 7 were captured. Laboratory analysis confirmed White Rose crude in three of four samples submitted. HOOL’s post-incident investigation determined the connector failure was caused by hydrate formation within the pressure-balancing mechanism, impairing its function. In light of the aforementioned, Husky Oil Operations Limited was formally charged with contravening provisions of multiple Acts. |
| Charges: |
Count 3 of the October 18, 2021, C-NLOPB Information:
Did, on or about November 16, 2018, in the Canada-Newfoundland and Labrador offshore area, in the Exclusive Economic Zone of Canada, having ceased work or activity that was likely to cause pollution, did resume work without ensuring it could do so safely and without pollution, from at or near the White Rose Field To Wit: at or near South White Rose Extension Drill Centre, contrary to subsection 24(2) of the Newfoundland Offshore Petroleum Drilling and Production Regulations SOR/2009-316, thereby committing offences pursuant to paragraph 194(1)(a) of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act.
Count 2 of the November 3, 2021, ECCC Information:
On or about the 16th day of November 2018, in Canadian fisheries waters, within the Exclusive Economic Zone of Canada, adjacent to the Province of Newfoundland and Labrador, at or near the South White Rose Extension of the White Rose Oil Field, being a person described in Subsection 38(5), did fail to take all reasonable measures consistent with public safety and with the conservation and protection of fish and fish habitat to prevent an occurrence described under Subsection 38(5) or to counteract, mitigate or remedy any adverse effects that result from the occurrence or might reasonably be expected to result from it, contrary to Subsection 38(6) of the Fisheries Act, R.S.C., 1985, C. F-14, as amended, and did thereby commit an offence in violation of Subsection 40(3)(e) of the Fisheries Act, R.S.C., 1985, C. F-14.
Count 3 of the November 3, 2021, ECCC Information:
On or about the 16th day of November 2018, in the Exclusive Economic Zone of Canada, adjacent to the Province of Newfoundland and Labrador, at or near the South White Rose Extension of the White Rose Oil Field, did unlawfully deposit a substance that is harmful to migratory birds, namely Crude Oil, or permit such a substance to be deposited, in waters or an area frequented by migratory birds or in a place from which the substance may enter such waters or such an area, to wit: the Atlantic Ocean, contrary to Subsection 5.1(1) of the Migratory Birds Convention Act, 1994 (S.C. 1994, c. 22), as amended, and did thereby commit an offence in violation of Subsection 13(1) of the Migratory Birds Convention Act, 1994 (S.C. 1994, c. 22). |
| Enforcement notification: | Husky Oil Operations Limited fined $2.5 million for three offences under federal legislation related to crude oil release in Newfoundland and Labrador offshore |
| Result: | Guilty Plea |
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| Date of conviction: | 2024-02-28 |
| Court level: | Provincial and Territorial Court |
| Nature of offense(s): |
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| Additional details about the nature of the offense: |
Subsection 24(2) of the Newfoundland Offshore Petroleum Drilling and Production Regulations SOR/2009-316, thereby committing offences pursuant to paragraph 194(1)(a) of the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act. Subsection 38(6) of the Fisheries Act, R.S.C., 1985, C. F-14, as amended, and did thereby commit an offence in violation of Subsection 40(3)(e) of the Fisheries Act, R.S.C., 1985, C. F-14.
Subsection 5.1(1) of the Migratory Birds Convention Act, 1994 (S.C. 1994, c. 22), as amended, and did thereby commit an offence in violation of Subsection 13(1) of the Migratory Birds Convention Act, 1994 (S.C. 1994, c. 22).
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| Act | Regulations | Section(s) |
|---|---|---|
| Migratory Birds Convention Act, 1994 | MBCA - Section(s) | 13.2; 16 (1) (c) |
| Pollution Prevention provisions (subsection 36(3)) of the Fisheries Act | 79.2 (c) 40 (6) | |
| Other - see 'Charges' section | C-NLAAIA |
| Date of sentencing: |
2024-04-26 |
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| Location of sentencing: | St. John's, NL |
| Sentence(s): |
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| Amount of fine(s): | $2,500,000 |
| Sentencing details: |
HUSKY OIL OPERATIONS LIMITED (HOOL) of Calgary, Alberta, having been convicted this day of the following offences pursuant to the Canada-Newfoundland and Labrador Atlantic Accord Implementation Act (C-NLAAIA), the Fisheries Act (FA) and the Migratory Birds Convention Act, 1994 (MBCA):
AND WHEREAS section 40(6) of the FA and section 13.2 of the MBCA require that all fines received by the Receiver General for offences committed under the FA and MBCA must be paid into the Environmental Damages Fund (EDF);
AND WHEREAS section 734.4 of the Criminal Code requires that a fine for which no provision for the application of the proceeds is made, other than this section, must be paid to the Receiver General of Canada;
AND WHEREAS, having regard of the circumstances of the offences and the offender, a fit and appropriate sentence for the offences is as follows:
First Count — A fine of One Hundred Thousand ($100,000) Dollars
Second Count — A fine of One Hundred Thousand ($100,000) Dollars
Third Count — A fine of One Million, Five Hundred Thousand ($1,500,000) Dollars
IT IS HEREBY ORDERED THAT the total fine amount of One Million Seven Hundred Thousand ($1,700,000) Dollars be paid to the Receiver General of Canada in trust to the Environmental Damages Fund, care of Environment and Climate Change Canada.
IT IS FURTHER HEREBY ORDERED that pursuant to section 79.2 of the FA Four Hundred Thousand ($400,000) Dollars be paid to the EDF;
AND IT IS FURTHER HEREBY ORDERED that pursuant to section 196(1) of the C-NLAAIA Four Hundred Thousand ($400,000) be paid to the EDF;
AND IT IS FURTHER HEREBY ORDERED that pursuant to section 79.2(c) of the FA and section 16(1)(c) of the MBCA, HOOL shall publish and maintain the agreed statement of facts underlying the convictions on the Offshore portion of Cenovus’s website for a period of one (1) calendar year, commencing not more than one (1) week following the issuance of this Order.
IT IS LASTLY ORDERED that the total payment of Two Million Five Hundred Thousand ($2,500,000) Dollars be made to the Clerk of the Court in St. John’s, Newfoundland within thirty (30) days of the date of this Order.
DATED at the City of St. John's, in the Province of Newfoundland and Labrador, the 8th day of May 2024. |