Guest Post by Ron Penney
We’ve been told that the drop dead date for the sanctioning of the refit for the Terra Nova FPSO is June 15th and that the decision must be unanimous among the partners. Every indication is that there isn’t unanimity and that the likely result will be that the refit will not go ahead and the field will be decommissioned and abandoned.
The Official Opposition has disclosed a briefing note from provincial officials on the possibility of the province taking an equity position in the project. This would have been a mistake given our dire fiscal situation. We can’t afford to take any more risks. Muskrat Falls, I rest my case.
I’m
pleased that the government just announced that they aren’t going to go down
that road.
Taking an equity position would require even more borrowing, exposing ourselves to further credit rating downgrades, already trending downwards. Once the ratings get to the point that they are no longer investment grade, they would be junk bonds attracting higher rates of interest, assuming anyone would lend us more money.
