Government, Exxon Mobil reach settlement on Hebron oil development work

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The provincial government has reached a settlement with Exxon Mobil over construction work associated with the Hebron oil development.

Premier Kathy Dunderdale held a news conference this afternoon to say $150 million will be paid to the province in exchange for lost work.

The payment will be given in June of 2016.

She said the government is always working to make sure the government gets "maximum benefit" on the Hebron project.

Dunderdale was flanked by Finance Minister Tom Marshall and Natural Resources Minister Jerome Kennedy.

In the original Hebron benefits agreement, the provincial government negotiated for three topsides modules to be built in the province.

One module is being built at Bull Arm and the other one is being constructed in Marystown, but Exxon Mobil says there's nowhere to build the third module in the province, and if they tried to build it here, the project would be irreparably delayed.

The provincial government had insisted that the third module could also be built at Bull Arm.

A news release notes the Hebron oil field contains in excess of 704 million barrels of recoverable resources, based on estimates of the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB).

Current analysis indicates the total value of Hebron to the province to be in excess of $20 billion.

Peak employment is estimated at 3,500 persons, and current estimates are that approximately 11 million person hours of employment will occur in the province exceeding expectations at the signing of the Benefits Agreement due to the overall growth of the project.

As a result of 20 to 30 per cent growth in topside weight, additional employment is anticipated with in-province Hebron work even with the third module fabricated out of province.

 The provisions in the Hebron Benefits Agreement provided opportunity to address disputes related to in-province fabrication. Following mediation, the provincial government and project proponents ExxonMobil, Chevron Canada Limited, Statoil Canada Limited, Suncor Energy Inc., and Nalcor Energy – Oil and Gas Inc. settled on compensation.

Full coverage in Friday’s print edition.

Organizations: Exxon Mobil, Exxon Mobile

Geographic location: Hebron, Marystown

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Recent comments

  • absent leadership
    October 11, 2012 - 19:50

    If Newfoundland can't get maximum benefits from our own natural resources, leave the G. D. stuff in the ground. fish goin to china. visosy's bay ore goin to Ont and Manitoba. oil goin to USA. hydro goin to Quebec. workers goin to Ft Mac, why would the youth get the impression that there is NO future here in Newfoundland? I wonder...

  • Avalon Pothole Driver
    October 11, 2012 - 18:49

    I agree with the oil company, you can't wait until these people get their stuff ready to do work for you. This province is light years behind the requirements of the 21st century. If NL is not able to perform certain work on time let them stay asleep and get it done at a different place. This is the beauty of the western world, we are not in china or russia.

  • Harvey
    October 11, 2012 - 17:46

    This would not have happened with Danny Williams at the helm. It's time for Ms. Dunderdale to go...she is incapable of handling a premiership!!!

  • Concerned
    October 11, 2012 - 17:04

    Yes, Dunderdale, Kennedy, and Marshall, give all the money away, Your to the point now you're giving the money away even before you've got it, all planned out. Not spending much on municipalities. Give something back to the people of this Province, us ratepayers/taxpayers, it wouldn't take much, and your expecting us to pay for Musk Rat Falls.

  • NowISee
    October 11, 2012 - 15:38

    I cannot wait to get my chance to vote these assclowns out of office. The longer I live here, the more I wish I didnt return. Looks like my family and I will be packing up and going back to live in Alberta. At least there is some form of democracy there with politicians having a backbone instead of slithering away at every given chance. Pathetic and weak bullies with a bunch of leeches tagging along on other peoples tailcoats.

  • John Smith
    October 11, 2012 - 14:25

    The Hibernia platform had several modules built in Korea, and we didn't get a cent for that. We only have so much capacity here...we are not Korea. The only option we had was to get the 150 million...there is no other alternative. I'm sure all the braniacs that comment here will have all the answers though...give me a break.

    • Little Man Dan
      October 11, 2012 - 20:51

      get off me Johnny; you lapdog lackey. you embarrass me. you'll always be a backbencher.

  • Fred
    October 11, 2012 - 14:06

    Disappointed plain and simple. Tradespersons will hurt especially those in the college system now.

  • Scott Free
    October 11, 2012 - 13:28

    A drop in the tank! what an insult; our Tory government is pandering to big oil again. With oil companies pumping hundreds of thousands of barrels a day out of our oilfields, $150M is a paltry sum to offset the loss of hundreds of jobs, thousands of man hours of work, and it's associated spinoffs. This is akin to the perverbial slap on the wrist. The oil and gouge industry is laughing all the way to the bank at our expense.

    • Eli
      October 11, 2012 - 14:22

      Scott Free, our record at Marystown is not exactly exemplary. It couldn't even deliver local ferries without a major hassle.

    • Eli
      October 11, 2012 - 14:24

      I should have added it's no wonder OCI got the hell out of there. Like working in a straig-jacket.

  • kevin
    October 11, 2012 - 13:27

    And is the $150 M going to go to the areas and people where the work would have been done??? Don't count on it! Sell Out !!!!!

    • Barry
      October 11, 2012 - 18:27

      Give me a break please! No the $150 million is not going to cover the lost revenue the Province would have gotten from building the module here and we all realize that. However, over the life of this project we will get approximately 20 Billion dollars thanks to the agreements with the oil companies signed by this and the previous PC government. I'll take $20 billion over $150 million anytime thank you very much. And by the way, thanks to the agreement signed in this particular deal we at least will get $150 million instead of nothing at all!