Offshore regulator questions who's in charge of SeaRose after iceberg scare

The head of the Canada-Newfoundland and Labrador Offshore Petroleum Board says the ball is now in Husky's court to determine when oil production resumes on the SeaRose FPSO.

"They followed their plan right up until the critical moment when they should have disconnected, and rather than do that, they chose another course of action," Scott Tessier told CBC News Thursday.

That failure to follow protocol is why the offshore regulator suspended Husky Energy from producing oil. In March of last year, with 84 employees on board and 340,000 barrels of oil, an iceberg came within fewer than 500 metres of the vessel.

Tessier and other board members met Thursday with senior Husky executives to outline their concerns and seek a solution. He wouldn't divulge the details of the meeting, but says he made it very clear that Husky no longer has the board's confidence.

He wouldn't elaborate because this is an "active file" and says "there is potential for additional enforcement action."

That additional enforcement could range from fines to prosecution.

Still on the job

As for the manager who didn't order the emergency disconnect last year when the iceberg was bearing down on the ship, as of Thursday he was still working on the SeaRose. Tessier says the board expressed concerns about this to Husky because there was a "risk of distraction."

He said that going forward, "I think we would carefully review the training and competency of the people in positions of authority."

Tessier says if the protocol had been followed, and the emergency disconnect had been done, it would take Husky anywhere from six to seven weeks to reconnect. That begs the question if financial considerations factor into these decisions.

Financial impact

Tessier says, "In situations like this, worker safety is first and foremost and that's what we expect from the operators as well."

The province will also feel the impact of the shutdown.

The finance department says stopping oil production on the SeaRose amounts to about $200,000 per day in deferred revenue. The oil is still there and the money will eventually come, but for now, it's on hold.

Husky officials are not commenting on the situation, but they will meet with the CNLOPB again on Friday to present a proposal for resumption of oil production.

How much this will cost the company is not known, but Husky Energy's overall stock price took a hit on Thursday, dropping about 6.5 percent.