$20 million in barge construction instead of pre-drilling offshore wells
© Cory Hurley/The Western Star
Natural Resources Minister Kathy Dunderdale speaks at the International Symposium on Oil and Gas Resources in Corner Brook Thursday.
Construction of $20 million worth of barges built in the province will replace the value of the Hebron pre-drilling work that was cancelled last year.
One or two barges may be built, and they’ll be used during the construction phase of the Hebron oil project.
Natural Resources Minister Kathy Dunderdale announced Friday the Hebron benefits agreement will be amended immediately to reflect the new fabrication work.
Late last year, the partners opted not to pre-drill up to 13 wells at the Hebron oilfield prior to installing the gravity-base structure (GBS) on the seabed.
“The provincial government agreed that such modifications were necessary, but also insisted that the loss of fabrication work associated with this proposal be replaced with an equivalent amount of new fabrication work,” Dunderdale said in a statement.
Construction of a 1,864-tonne barge will create a minimum of 106,300 person hours of work.
The barge construction translates into a year of full-time work for about 53 people.
More than one barge may be built, but the weight tonnage remains the same.
The number of barges to be built was not specified in the deal, according to the department spokesman. That will depend on what’s required during construction of the Hebron production platform.
During construction of the Hibernia platform at Bull Arm, the GBS was ringed by more than 15 barges of various sizes to assist with the installation of the topsides modules on that concrete pedestal.
If the barge construction is not completed, the Hebron partners will pay the province “up to $20 million, or the appropriate proportional amount … for a construction project to the benefit of the oil and gas industry,” according to Friday’s news release.
The Hebron partners original plan called for using a mobile rig to pre-drill wells.
Instead, the wells will be done from the GBS, which will be equipped with its own drilling derrick.
The pre-drilling work included fabrication of a sub-sea drilling template and components of the field mooring system, positioning and docking system.
In December, Dunderdale described the value of the pre-drilling work as “substantially less than $50 million” in the House of Assembly.