Premier thinking long term, mayor says

Moira Baird
Send to a friend

Send this article to a friend.

Politics/Offshore

Not even the potential loss of jobs can shake St. John's Mayor Andy Wells' support for the premier when it comes to an ownership stake in future offshore oil and gas projects.

Wells says Premier Danny Williams is taking the long-term view with the best interests of the province at heart.

St. John's Mayor Andy Wells

Not even the potential loss of jobs can shake St. John's Mayor Andy Wells' support for the premier when it comes to an ownership stake in future offshore oil and gas projects.

Wells says Premier Danny Williams is taking the long-term view with the best interests of the province at heart.

He says part of that long-term view includes an equity stake in projects like Hebron.

"You can think short term or you can think long term.

"But if we're really going to change this industry, you've really got to think long term, and that's what the premier's doing ... and there's people in the business community criticizing him. That's too bad, and I understand that," said Wells.

"I consider it fundamental that this issue of equity - the 4.9 per cent - be satisfactorily addressed. I don't understand the companies' reluctance with respect to this issue, particularly considering the premier's not asking for it for free."

Last April, a consortium of oil companies led by Chevron Canada suspended the Hebron project and disbanded the project team.

The Hebron partners said they could not reach a deal on fiscal and local benefits with the provincial government. Among those issues were a 4.9 per cent equity stake in the project and super-royalties for the province.

Wells says a seat at the owners' table of major offshore projects is the only way to get an inside view of the industry.

"It's important that we have a presence at the table when the big decisions are being made."

In last Wednesday's Telegram, Williams said he sympathizes with those in the offshore industry who are feeling the pinch without a major project in the offing.

"If there doesn't happen to be a job for someone in St. John's in an engineering firm, that's unfortunate," Williams said last week. "I'm not happy with that. But there has to be some price paid in the short term."

Wells says he doesn't want to see anyone lose a job, engineering or otherwise.

"That's certainly a possibility, but you just can't sell out the long term for short term. I support Danny 100 per cent on that.

"You've got to fundamentally establish your right to a reasonable measure of control over the industry. I want to see a situation where we do have the information and we do have the presence and we do have the right - that's what this is fundamentally all about."

A longtime advocate of local offshore benefits, Wells took the Terra Nova partners to court in 1998 to force the relocation of engineering jobs from Leatherhead, England, to St. John's.

He also chaired Friends of Gas Onshore (FOGO), a lobby group that wanted a Hibernia-style gravity base structure (GBS) used to develop the White Rose field. FOGO said a GBS would enable offshore natural gas to be developed and provide local construction jobs.

mbaird@thetelegram.com

Organizations: Chevron Canada

Geographic location: Hebron, St. John's, Terra Nova Leatherhead England White Rose

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments

Recent comments

  • Frank
    July 02, 2010 - 13:34

    When we complain about the short term impacts of a hard-nosed stance for long-term benefits, we need to think of Churchill Falls and the wonderful negotiating tactics of Mr. Smallwood. Classic example of short term thinking. I think we are all suffering from short-term memories.

  • Frustrated Taxpayer
    July 02, 2010 - 13:34

    Could Mayor Wells have ambitions of representing the Province at the board table for Hebron? With less than 1/5 of the province receiving a paycheck from the Private sector, it's no small wonder that the premier has the support of those that are employed through tax funded entities. There is a much bigger picture to consider tha extorting every last cent out of our resources. Put a favorable climate in place and business will invest their dollars. Continue to tax every cent possible and the natural reaction by business will be to move to more profitable ventures. Skilled workers have no employment, ambitious graduates no hope, and business leaders are not interested in merely surviving. Lose them, and we lose the foundation necessary for the province to grow. Our school population is declining by over 5% yearly with the median age of our citizens increasing. Seniors will flock to St. John's to avail of the only centre in the province with acceptable services, and our rural communities will wither. Tax rates will increase and employment becomes the direct responsibility of our provincial Government. I am not aware of any jurisdiction where this approach has been sustainable. Time to change tactics.

  • Mark
    July 02, 2010 - 13:27

    I see no reason why Newfoundland and Labrador should not ask for an equity position. Offshore oil and gas is a little different than the land based drilling and especially the oil sand developments. Offshore development is much faster and comes from much larger reservoirs.

    Chevron most likely suspended the project to wait out Danny's term in office. This also puts pressure on the government because of the negative impact on the industry locally. They are playing hardball to put it simply. And unless the same political resistance is maintained, they will most likely win.

    The first few projects were given away in an attempt to establish an industry, but the growth has been slower than anticipated so that plan is not working. We have to ask for more before its all gone.

  • Wesley
    July 02, 2010 - 13:26

    Hey Ian, relax those sphincters and let your head slip from your butt. Then you should mind you're own business and save your comments for your own tribe. Who the hell do you think you are to tell us to kick out Premier Danny Williams?

  • David
    July 02, 2010 - 13:26

    It is refreshing to see a Premier who is governing the province as a long term project in the best interests of the residents as opposed to what is politically expedient on a four year cycle. We have seen enough saviours come and go to make us realize that we have to think about what decisions mean to our children. Premier Williams is giving us that long term thinking and I applaud him for that.

  • Newfoundlander in Houston
    July 02, 2010 - 13:24

    What Andy Wells and the Premier must realize is that oil companies would rather have a root canal than work with a government that has an equity stake in their project. How do you think Danny Williams would have reacted if the Government of Newfoundland demanded an equity stake in Cable Atlantic? The role of government should be to regulate the resource and collect economic rent (i.e. royalties) on behalf of the people of the Province. Demanding an equity stake is not thinking long term because it is destructive to creating a lasting climate attractive to investment. Due to higher oil prices resource nationalization is a common theme these days in the oil industry. What the Premier is demanding is really not much different to what other political leaders like Hugo Chavez and Vladimir Putin are also seeking for their country. That makes for good local politics, but history has proven time and time again this behavior is ultimately destructive to foreign investment and long term development of the resource.

  • Lori
    July 02, 2010 - 13:22

    I say great job Mr. Williams!! He is the only Premier that has ever stood up for NL. The people of this province have been subject to passive politicians for way too long. Mr. Williams is fighting for us all. It is high time we get some benefit from our resources, not give them away like has always been done in the past. Stand you ground Mr. Williams!!

  • Scott
    July 02, 2010 - 13:22

    This is coming from the same city council that wanted to buy a hockey team. I heard they were thinking about calling them the St. John's Red Army. Newfoundland desperately needs less government and more business. I think Danny Williams should cross the floor to the NDP. He's not a real conservative.

  • Michael
    July 02, 2010 - 13:21

    I do believe that Newfoundland will become prosperous and be the envy of every Canadian. It will not happen overnight as some people may think. It will take time. We need to take a long term approach and that means making good deals that will generate revenue. People seem to forget that Alberta has been producing oil and gas for the last 60 years, whereas in Newfoundland it has only been 10 years. People shouldn't expect our oil and gas industry to be as developed or as lucrative as Albertas, especially at this point in time.

    Danny's equity stand on Hebron had to be done. I think the message is getting out to the big players in the oil industry and hopefully this equity policy will become standard practice in our offshore. In an article in 'The Globe and Mail' called, Husky mulls nuclear option in oil sands Husky's John Lau states that he is willing to let Newfoundland become an equity partner in a gas project. This is an amazing statement and a sign that an equity position is not impossibe to achieve. I think that oil companies are taking note of the government's modest demands and will accomodate. Hopefully, once the Energy Policy is released it will clearly show where the government is going with equity participation and other policy changes. The message has been sent! I really do think we are on the right path in dealing with the outside industry, but we must be careful not to be defeated from within our own community.

    Michael Hinks

  • wayne
    July 02, 2010 - 13:21

    I have no love for Danny Williams or his government. They have treated me personally most wretchedly, and their failures in the health care field and in dealing with rural issues such as the fishery are glaring and disgraceful. Nonetheless, I have to speak honestly, and I do therefore agree with Andy Wells that Williams position on offshore development is the correct one for the province over the long term. It is unfortunate that some may loose their jobs now because of his stand, but remember business slashes thousands of jobs every day just to pander the selfishness of a tiny greedy few. In this case, small job losses now may mean more and better jobs for more people in the future.

    If we could stop the miserable, cowardly and abusive treatment of ordinary Newfoundlanders by the Williams government, then we might have in them the best of a very bad bunch. Their stand on behalf of the province on several importantr issues is certainly worthy of praise and support, even if little else about them is.

  • Dave
    July 02, 2010 - 13:18

    I am writing this comment from Ontario because of the short-sightedness of previous Governments. That's why NL is in the position it is in right now. Also, if you look at the rest of these comments, you will notice that generally, people not living at home right now support the long-term approach while the people still back there are the ones complaining (there are some exceptions of course). Those who have moved away tend to have a sense that the reason that we are away is because previous deals didn't look out for the long-term future of NL. Those still hanging on at home, and by hanging on, I am referring to those who right now don't have jobs and are complaining that the government should do something NOW so that they have a job, regardless of the cost, just don't seem to get it. I'm not necessarily a big Danny fan, but at least he is looking at the big picture and for that, he definitely has my support. My take on the whole thing boils down to this - if a short-term approach is taken, maybe I can get back home soon to raise my family only to watch my daughter grow up and leave. If a long-term approach is taken, maybe I will be a little longer before I get home, but when I do, I will be able to watch my kids grow up in NL & raise their children there too. I want my kids to grow up in NL & I am willing to sacrifice a few years of my life to accomplish this! Any other approach is just selfish!

  • Larry
    July 02, 2010 - 13:17

    I really can't understand why people are confused to why Premier Williams wants a share of what if RIGHTFULLY OURS!!! How many giveaways do we have to witness before we realize that a longterm wait can outweigh the short term gains. The oil is going no where and the oil companies still want it. So we don't make a deal this tear or next but sooner rather than later the oil companies will make a deal. With oil hitting record prices the oil companies will want to make as much profit as they can. If we make the deal they want we lose, so why not take the time to get the deal we want. It's not as if anyone ever gave us anything before, the premier will continue to fight to get us a better deal and that is what he should do. Instead of the giveaways of the previous governments we now are making history by getting something make for our resources. The problem with this seems to be that companies like EXXON are still greedy for a bigger piece of the pie. Well I hope the premier continues the course of NOT ON MY SHIFT!!!!!

  • Newfoundlander in Houston
    July 02, 2010 - 13:15

    To the Newfoundlander in Calgary: I have to say that you have a firm grasp on reality!

  • Robert
    July 02, 2010 - 13:14

    I wonder how cavalier Andy Wells would be if it were his job eliminated by the lack of oil and gas business in St. John's. It seems to me that the city is benefiting from inflated property values resulting in a bigger budget for the city (paid in part by my tax dolloar) and no financial pressure. Ironically, I've just read a story about Alberta residents having challenges with the rapid pace of growth in their economy. With decision makers such as Williams and his cheerleader Andy in positions of power, it's difficult to envision that theres any threat of that enviable predicament in NL's future.

  • Calvin
    July 02, 2010 - 13:12

    To Newfoundlander in Houston from Newfoundlander in Gander. I see you brought forward the bugbear Chavez again. Why don't you check out Norway?

  • Newfoundlander
    July 02, 2010 - 13:12

    Continued

    5.I do agree that Hebron will get done someday. The quantity of oil is large such that despite the heavy nature and large number of wells required there will come a day when it will be done. But frankly I have no idea when that will be. But people that assume that oil will just go up and up and up in price ignore a lot of history. It was not that long ago that oil was $12 a barrell. Also, if hebron is delayed long enough, options like producing the oil at Hibernia become much more feasible. It might mean a far more profitable project with lots more profit and royalties but much less work done in Newfoundland.

    6. I have no doubt that Premier Williams is doing what he thinks is best for the province. However he has appeared to be downright hostile to the oil industry. The attempt to place Andy Wells as chairman of the CNLOBP looked petulant and silly in the face of clear and binding legislation that had chosen another person. Also Andy Wells?? Even if you love Andy do you for a moment think he is the appropriate person to take a position where there is a statutory duty to treat the oil companies fairly. I can think of many positive adjectives for Andy wells but FAIR would not lead the list.

    7. Lastly I don't understand why we can be so confident about the Newfoundland oil industry. The last several wells (Flemish pass anyone?) have been duds despite hundreds of millions expended. There may be lots more oil out there but its a risky place where it costs a hundred million to drill something with a 1 in 10 chance of a commerical find. Companies take that risk for the chance at very big profits but if you eliminate that possible HUGE prize, you make it less likely that companies will explore. Right now we have Hebron and some possible gas projects. The next great hope in the Orphan is experiencing all kinds of drilling problems and cost overruns . . . So at best it is a good area but it is not the hottest thing out there. Don't delude yourself otherwise


    I have gone on long enough. I work in the oil industry (on BC and Alberta projects) and am intensely interested in the Newfoundland offshore. My fear is that in his quest for what he says is FAIR, the demands have become unrealistic. The reality though is that I and probably none of the others commenting on this story, have the detailed economic information you would need to know to assess things. What is fair after all? One percent or fifteen percent royalty can be fair and economic depending on the type of development. My fear is that the legacy of bad deals means that government is terrified to make reasonable deals.

  • ian
    July 02, 2010 - 13:12

    To Larry, its foolishness like yours which means that people dont have a shift to get the cash to buy the pies!

    Waken-up boy!

  • Mike
    July 02, 2010 - 13:10

    Danny is the best thing that happened to Newfoundland in many years. If the province continues with a short term outlook, the economy will continue to suffer and this will have a directly negative impact on every Newfoundlander. I can only hope that educated business-minded people will continue to run government - it's the only chance we have to change the struggling economy that has plagued Newfoundland for decades. Congrats Danny on trying to break the cycle.

  • Rick
    July 02, 2010 - 13:10

    Views and opinions vary on the approack taken by the Premier of my home province.

    Differing opinions and postions are healthy to ensure a vibrant and heartelt debate on such an important issue and indeed, opportunity.

    In terms of Premier Williams and the Hebron partners, I am in full agreement with his publically statde postion. Bravo!

    The issue here is not about royalties or economic rent as the energy sector likes to refer to in any and all dicsssion about fiscal arrangements.

    No, the issue is not as complex as some would like us to think. This is a non-renewable resource we are addressing. The Premier and his negotiating teamare the stewards of this invaluable resource and as such have a legal obligation to the men and women of NF, to manage this resource in the best interest of the province, not Chevron other mother Exxon.

    Taking a long term view and approach is refreshing to say the least whence one takes a long look back at our history of giveaways. No more folks.

    It takes two to tango and to the big boys in Dallas, Houstaon or Chicago, bargain hard, yet lets bargian in good faith - - don't pick up your marbles and go home when you don't like the score.

    Rick. Preston.
    Edmonton, Alberta.

  • a
    July 02, 2010 - 13:10

    as they say, dans the man ,and i think you all should wake up and smell the sulfer. danny is good for newfoundland. people who say give in to the big corporations and give them our oil are totaly wrong. i just pray that a gerry burne lead liberal goverment is never brought to light. its people like gerry burne and joey smallwood that are putting newfoundland in the hole and should be used for a drill bit out in the oil fields cause thats where they belong. and as for andy he might be a little rude but it seems like no one else wants the job he has, well there is ray o'neal but where would we be then?

  • Newfoundlander
    July 02, 2010 - 13:10

    A few points

    1. Equity in a project is not an unknown demand. However it is a very different thing to take equity at the exploration stage and pony up a share of the cost of the exploration wells and take the risks VERSUS waiting for private industry to take all the risks and then swoop in with what was a new demand to them. I offer no opinion on whether it is a good or bad demand . .. . .I just know that it was considered a new demand that radically changed the the rules for development. The Hebron consortium have spent half a billion bucks under a set of rules and those rules were changed from their perspective late in the day.

    2. Alberta regulates the oil industry much differently than the Williams government. You almost never negotiate with government in Alberta-- Government sets the rules and then abides by them-- no special handouts for a weak project or special new rules for good projects. If equity is the new requirement, the government need to specify what exactly that means. In the oil industry it means being a true owner and paying your share . . . ie being no different than the other partners-- Is this what Williams means?

    3.Hebron is definitely delayed at least 3 years off the timeline before the stall last year. The 60 member team has been disbanded, office space surrendered and a lot of the work that had been done (design, economics, industry capability studies) would be obsolete and need to be redone. There are just a couple of people doing anything on the project. It would take 18 months to 2 years for the partners to get this project back to the point of readiness of last April. So all the advocates of the go-slow approach should be happy since Hebron is NOT imminent.

    4.Even the largest oil companies only have the people and risk tolerance to do a limited number of super large projects each year. A Hebron needs to be COMPETITIVE to be done. Projects that are simply profitable don't get done . .. they have to be more profitable than the other projects that are available that the companies can do. This is simple business. My understanding is that with the provinces demands, Hebron was not that competitive and thus was shelved. I can only go by what the oil companies say on that . I believe that the spike in drilling costs negatively impacted Hebron economics as well since Hebron requires more numerous wells to extract the heavy oil.

    continued

  • Ian
    July 02, 2010 - 13:09

    We dont have political interference in the UK North Sea, the major of Aberdeen doesnt put pressure on oil companies to decide what kind of offshore development option a field should be.

    Results 100s of field developments and the NE of Scotland one of the richest places in Europe.

    Offshore NFD, 3 developments and still relatively poor!

    Kick this guy out and stop crying!

  • the same guy
    July 02, 2010 - 13:09

    ian, dude, you dont make sences man, the longer we wait the more the oil will be worth. its all right for you to talk over in the uk. come over to the rock and kiss my blarny stone

  • ICU Too
    July 02, 2010 - 13:08

    Wasn't Mayor Wells the first to defend the Premier in the Fiber Optics scam too? I smell a rat! Who's defending him in tomorrow's paper - the CEO of Persona???

  • Frank
    July 01, 2010 - 20:23

    When we complain about the short term impacts of a hard-nosed stance for long-term benefits, we need to think of Churchill Falls and the wonderful negotiating tactics of Mr. Smallwood. Classic example of short term thinking. I think we are all suffering from short-term memories.

  • Frustrated Taxpayer
    July 01, 2010 - 20:23

    Could Mayor Wells have ambitions of representing the Province at the board table for Hebron? With less than 1/5 of the province receiving a paycheck from the Private sector, it's no small wonder that the premier has the support of those that are employed through tax funded entities. There is a much bigger picture to consider tha extorting every last cent out of our resources. Put a favorable climate in place and business will invest their dollars. Continue to tax every cent possible and the natural reaction by business will be to move to more profitable ventures. Skilled workers have no employment, ambitious graduates no hope, and business leaders are not interested in merely surviving. Lose them, and we lose the foundation necessary for the province to grow. Our school population is declining by over 5% yearly with the median age of our citizens increasing. Seniors will flock to St. John's to avail of the only centre in the province with acceptable services, and our rural communities will wither. Tax rates will increase and employment becomes the direct responsibility of our provincial Government. I am not aware of any jurisdiction where this approach has been sustainable. Time to change tactics.

  • Mark
    July 01, 2010 - 20:14

    I see no reason why Newfoundland and Labrador should not ask for an equity position. Offshore oil and gas is a little different than the land based drilling and especially the oil sand developments. Offshore development is much faster and comes from much larger reservoirs.

    Chevron most likely suspended the project to wait out Danny's term in office. This also puts pressure on the government because of the negative impact on the industry locally. They are playing hardball to put it simply. And unless the same political resistance is maintained, they will most likely win.

    The first few projects were given away in an attempt to establish an industry, but the growth has been slower than anticipated so that plan is not working. We have to ask for more before its all gone.

  • Wesley
    July 01, 2010 - 20:14

    Hey Ian, relax those sphincters and let your head slip from your butt. Then you should mind you're own business and save your comments for your own tribe. Who the hell do you think you are to tell us to kick out Premier Danny Williams?

  • David
    July 01, 2010 - 20:12

    It is refreshing to see a Premier who is governing the province as a long term project in the best interests of the residents as opposed to what is politically expedient on a four year cycle. We have seen enough saviours come and go to make us realize that we have to think about what decisions mean to our children. Premier Williams is giving us that long term thinking and I applaud him for that.

  • Newfoundlander in Houston
    July 01, 2010 - 20:10

    What Andy Wells and the Premier must realize is that oil companies would rather have a root canal than work with a government that has an equity stake in their project. How do you think Danny Williams would have reacted if the Government of Newfoundland demanded an equity stake in Cable Atlantic? The role of government should be to regulate the resource and collect economic rent (i.e. royalties) on behalf of the people of the Province. Demanding an equity stake is not thinking long term because it is destructive to creating a lasting climate attractive to investment. Due to higher oil prices resource nationalization is a common theme these days in the oil industry. What the Premier is demanding is really not much different to what other political leaders like Hugo Chavez and Vladimir Putin are also seeking for their country. That makes for good local politics, but history has proven time and time again this behavior is ultimately destructive to foreign investment and long term development of the resource.

  • Lori
    July 01, 2010 - 20:06

    I say great job Mr. Williams!! He is the only Premier that has ever stood up for NL. The people of this province have been subject to passive politicians for way too long. Mr. Williams is fighting for us all. It is high time we get some benefit from our resources, not give them away like has always been done in the past. Stand you ground Mr. Williams!!

  • Scott
    July 01, 2010 - 20:06

    This is coming from the same city council that wanted to buy a hockey team. I heard they were thinking about calling them the St. John's Red Army. Newfoundland desperately needs less government and more business. I think Danny Williams should cross the floor to the NDP. He's not a real conservative.

  • Michael
    July 01, 2010 - 20:05

    I do believe that Newfoundland will become prosperous and be the envy of every Canadian. It will not happen overnight as some people may think. It will take time. We need to take a long term approach and that means making good deals that will generate revenue. People seem to forget that Alberta has been producing oil and gas for the last 60 years, whereas in Newfoundland it has only been 10 years. People shouldn't expect our oil and gas industry to be as developed or as lucrative as Albertas, especially at this point in time.

    Danny's equity stand on Hebron had to be done. I think the message is getting out to the big players in the oil industry and hopefully this equity policy will become standard practice in our offshore. In an article in 'The Globe and Mail' called, Husky mulls nuclear option in oil sands Husky's John Lau states that he is willing to let Newfoundland become an equity partner in a gas project. This is an amazing statement and a sign that an equity position is not impossibe to achieve. I think that oil companies are taking note of the government's modest demands and will accomodate. Hopefully, once the Energy Policy is released it will clearly show where the government is going with equity participation and other policy changes. The message has been sent! I really do think we are on the right path in dealing with the outside industry, but we must be careful not to be defeated from within our own community.

    Michael Hinks

  • wayne
    July 01, 2010 - 20:05

    I have no love for Danny Williams or his government. They have treated me personally most wretchedly, and their failures in the health care field and in dealing with rural issues such as the fishery are glaring and disgraceful. Nonetheless, I have to speak honestly, and I do therefore agree with Andy Wells that Williams position on offshore development is the correct one for the province over the long term. It is unfortunate that some may loose their jobs now because of his stand, but remember business slashes thousands of jobs every day just to pander the selfishness of a tiny greedy few. In this case, small job losses now may mean more and better jobs for more people in the future.

    If we could stop the miserable, cowardly and abusive treatment of ordinary Newfoundlanders by the Williams government, then we might have in them the best of a very bad bunch. Their stand on behalf of the province on several importantr issues is certainly worthy of praise and support, even if little else about them is.

  • Dave
    July 01, 2010 - 19:59

    I am writing this comment from Ontario because of the short-sightedness of previous Governments. That's why NL is in the position it is in right now. Also, if you look at the rest of these comments, you will notice that generally, people not living at home right now support the long-term approach while the people still back there are the ones complaining (there are some exceptions of course). Those who have moved away tend to have a sense that the reason that we are away is because previous deals didn't look out for the long-term future of NL. Those still hanging on at home, and by hanging on, I am referring to those who right now don't have jobs and are complaining that the government should do something NOW so that they have a job, regardless of the cost, just don't seem to get it. I'm not necessarily a big Danny fan, but at least he is looking at the big picture and for that, he definitely has my support. My take on the whole thing boils down to this - if a short-term approach is taken, maybe I can get back home soon to raise my family only to watch my daughter grow up and leave. If a long-term approach is taken, maybe I will be a little longer before I get home, but when I do, I will be able to watch my kids grow up in NL & raise their children there too. I want my kids to grow up in NL & I am willing to sacrifice a few years of my life to accomplish this! Any other approach is just selfish!

  • Larry
    July 01, 2010 - 19:57

    I really can't understand why people are confused to why Premier Williams wants a share of what if RIGHTFULLY OURS!!! How many giveaways do we have to witness before we realize that a longterm wait can outweigh the short term gains. The oil is going no where and the oil companies still want it. So we don't make a deal this tear or next but sooner rather than later the oil companies will make a deal. With oil hitting record prices the oil companies will want to make as much profit as they can. If we make the deal they want we lose, so why not take the time to get the deal we want. It's not as if anyone ever gave us anything before, the premier will continue to fight to get us a better deal and that is what he should do. Instead of the giveaways of the previous governments we now are making history by getting something make for our resources. The problem with this seems to be that companies like EXXON are still greedy for a bigger piece of the pie. Well I hope the premier continues the course of NOT ON MY SHIFT!!!!!

  • Newfoundlander in Houston
    July 01, 2010 - 19:54

    To the Newfoundlander in Calgary: I have to say that you have a firm grasp on reality!

  • Robert
    July 01, 2010 - 19:54

    I wonder how cavalier Andy Wells would be if it were his job eliminated by the lack of oil and gas business in St. John's. It seems to me that the city is benefiting from inflated property values resulting in a bigger budget for the city (paid in part by my tax dolloar) and no financial pressure. Ironically, I've just read a story about Alberta residents having challenges with the rapid pace of growth in their economy. With decision makers such as Williams and his cheerleader Andy in positions of power, it's difficult to envision that theres any threat of that enviable predicament in NL's future.

  • Calvin
    July 01, 2010 - 19:50

    To Newfoundlander in Houston from Newfoundlander in Gander. I see you brought forward the bugbear Chavez again. Why don't you check out Norway?

  • Newfoundlander
    July 01, 2010 - 19:49

    Continued

    5.I do agree that Hebron will get done someday. The quantity of oil is large such that despite the heavy nature and large number of wells required there will come a day when it will be done. But frankly I have no idea when that will be. But people that assume that oil will just go up and up and up in price ignore a lot of history. It was not that long ago that oil was $12 a barrell. Also, if hebron is delayed long enough, options like producing the oil at Hibernia become much more feasible. It might mean a far more profitable project with lots more profit and royalties but much less work done in Newfoundland.

    6. I have no doubt that Premier Williams is doing what he thinks is best for the province. However he has appeared to be downright hostile to the oil industry. The attempt to place Andy Wells as chairman of the CNLOBP looked petulant and silly in the face of clear and binding legislation that had chosen another person. Also Andy Wells?? Even if you love Andy do you for a moment think he is the appropriate person to take a position where there is a statutory duty to treat the oil companies fairly. I can think of many positive adjectives for Andy wells but FAIR would not lead the list.

    7. Lastly I don't understand why we can be so confident about the Newfoundland oil industry. The last several wells (Flemish pass anyone?) have been duds despite hundreds of millions expended. There may be lots more oil out there but its a risky place where it costs a hundred million to drill something with a 1 in 10 chance of a commerical find. Companies take that risk for the chance at very big profits but if you eliminate that possible HUGE prize, you make it less likely that companies will explore. Right now we have Hebron and some possible gas projects. The next great hope in the Orphan is experiencing all kinds of drilling problems and cost overruns . . . So at best it is a good area but it is not the hottest thing out there. Don't delude yourself otherwise


    I have gone on long enough. I work in the oil industry (on BC and Alberta projects) and am intensely interested in the Newfoundland offshore. My fear is that in his quest for what he says is FAIR, the demands have become unrealistic. The reality though is that I and probably none of the others commenting on this story, have the detailed economic information you would need to know to assess things. What is fair after all? One percent or fifteen percent royalty can be fair and economic depending on the type of development. My fear is that the legacy of bad deals means that government is terrified to make reasonable deals.

  • ian
    July 01, 2010 - 19:48

    To Larry, its foolishness like yours which means that people dont have a shift to get the cash to buy the pies!

    Waken-up boy!

  • Mike
    July 01, 2010 - 19:47

    Danny is the best thing that happened to Newfoundland in many years. If the province continues with a short term outlook, the economy will continue to suffer and this will have a directly negative impact on every Newfoundlander. I can only hope that educated business-minded people will continue to run government - it's the only chance we have to change the struggling economy that has plagued Newfoundland for decades. Congrats Danny on trying to break the cycle.

  • Rick
    July 01, 2010 - 19:46

    Views and opinions vary on the approack taken by the Premier of my home province.

    Differing opinions and postions are healthy to ensure a vibrant and heartelt debate on such an important issue and indeed, opportunity.

    In terms of Premier Williams and the Hebron partners, I am in full agreement with his publically statde postion. Bravo!

    The issue here is not about royalties or economic rent as the energy sector likes to refer to in any and all dicsssion about fiscal arrangements.

    No, the issue is not as complex as some would like us to think. This is a non-renewable resource we are addressing. The Premier and his negotiating teamare the stewards of this invaluable resource and as such have a legal obligation to the men and women of NF, to manage this resource in the best interest of the province, not Chevron other mother Exxon.

    Taking a long term view and approach is refreshing to say the least whence one takes a long look back at our history of giveaways. No more folks.

    It takes two to tango and to the big boys in Dallas, Houstaon or Chicago, bargain hard, yet lets bargian in good faith - - don't pick up your marbles and go home when you don't like the score.

    Rick. Preston.
    Edmonton, Alberta.

  • a
    July 01, 2010 - 19:46

    as they say, dans the man ,and i think you all should wake up and smell the sulfer. danny is good for newfoundland. people who say give in to the big corporations and give them our oil are totaly wrong. i just pray that a gerry burne lead liberal goverment is never brought to light. its people like gerry burne and joey smallwood that are putting newfoundland in the hole and should be used for a drill bit out in the oil fields cause thats where they belong. and as for andy he might be a little rude but it seems like no one else wants the job he has, well there is ray o'neal but where would we be then?

  • Newfoundlander
    July 01, 2010 - 19:45

    A few points

    1. Equity in a project is not an unknown demand. However it is a very different thing to take equity at the exploration stage and pony up a share of the cost of the exploration wells and take the risks VERSUS waiting for private industry to take all the risks and then swoop in with what was a new demand to them. I offer no opinion on whether it is a good or bad demand . .. . .I just know that it was considered a new demand that radically changed the the rules for development. The Hebron consortium have spent half a billion bucks under a set of rules and those rules were changed from their perspective late in the day.

    2. Alberta regulates the oil industry much differently than the Williams government. You almost never negotiate with government in Alberta-- Government sets the rules and then abides by them-- no special handouts for a weak project or special new rules for good projects. If equity is the new requirement, the government need to specify what exactly that means. In the oil industry it means being a true owner and paying your share . . . ie being no different than the other partners-- Is this what Williams means?

    3.Hebron is definitely delayed at least 3 years off the timeline before the stall last year. The 60 member team has been disbanded, office space surrendered and a lot of the work that had been done (design, economics, industry capability studies) would be obsolete and need to be redone. There are just a couple of people doing anything on the project. It would take 18 months to 2 years for the partners to get this project back to the point of readiness of last April. So all the advocates of the go-slow approach should be happy since Hebron is NOT imminent.

    4.Even the largest oil companies only have the people and risk tolerance to do a limited number of super large projects each year. A Hebron needs to be COMPETITIVE to be done. Projects that are simply profitable don't get done . .. they have to be more profitable than the other projects that are available that the companies can do. This is simple business. My understanding is that with the provinces demands, Hebron was not that competitive and thus was shelved. I can only go by what the oil companies say on that . I believe that the spike in drilling costs negatively impacted Hebron economics as well since Hebron requires more numerous wells to extract the heavy oil.

    continued

  • Ian
    July 01, 2010 - 19:44

    We dont have political interference in the UK North Sea, the major of Aberdeen doesnt put pressure on oil companies to decide what kind of offshore development option a field should be.

    Results 100s of field developments and the NE of Scotland one of the richest places in Europe.

    Offshore NFD, 3 developments and still relatively poor!

    Kick this guy out and stop crying!

  • the same guy
    July 01, 2010 - 19:44

    ian, dude, you dont make sences man, the longer we wait the more the oil will be worth. its all right for you to talk over in the uk. come over to the rock and kiss my blarny stone

  • ICU Too
    July 01, 2010 - 19:43

    Wasn't Mayor Wells the first to defend the Premier in the Fiber Optics scam too? I smell a rat! Who's defending him in tomorrow's paper - the CEO of Persona???