The provincial government has valiantly tried to put a good face on the loss of fabrication of a module for the Hebron offshore development by touting the $150 million penalty paid to them by the project proponents. I do not think this is a good thing.
Effectively, this is admitting to the world that the province’s infrastructure is not capable of taking on this work, presumably through a lack of capacity or whatever. Put another way, Hebron is saying that the province’s fabrication capacity is so inadequate that it is willing to spend $150 million to get away from it and take their business elsewhere.
The details behind this action are not as important as the action itself. The fact that the province negotiated this clause in the Hebron Benefits Agreement shows they were aware of inadequacies in our fabrication capacity — a pity they could not have addressed the capacity issue itself.
One hundred and 50 million dollars may seem like a lot of money but does it compare to the message that we may now leaving with the world, namely that we are not really seriously developing our fabrication capacity to attract future such post-Hebron (or for that matter, post-oil) construction?