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January 9, 2013

Hebron offshore oil project expected to create 3,500 jobs during its construction

ST. JOHN’S, N.L.

Newfoundland and Labrador’s waning offshore oil industry received a much-needed boost after ExxonMobil Corp. said on Jan. 4 it has approved the Hebron offshore oil project.

The Texas-based oil company announced it will proceed with the $14 billion development, which is estimated to contain more than 700 million barrels of oil.

ExxonMobil says it expects Hebron to begin producing oil before the end of 2017 and up to 3,500 people will be employed during its construction phase. The offshore platform is being designed to produce 150,000 barrels of oil per day.

The sanction comes as the province’s oil sector which includes the White Rose, Terra Nova and Hibernia offshore oil platforms — battles a decline in production.

Last month, Newfoundland and Labrador’s Finance Department said oil production was down 28.5 per cent in the first three quarters of last year compared to the same period in 2011.

The drop has taken a toll on the province’s revenue, with a projected $725.8 million deficit, nearly triple its last forecast, which the government partly attributes to plunging production.

CANADIAN ENVIRONMENTAL ASSESSMENT AGENCY

The Hebron Project will include the construction of a concrete gravity-based structure (GBS) at Bull Arm, Trinity Bay and the GBS installation, operation, maintenance, and decommissioning at the Hebron Field, northeast Grand Banks. The development project will cost $14 billion.

“The development of Hebron will result in an increase to offshore production, provincial royalties and provide tremendous opportunity for employment and businesses in the province,’’ Natural Resources Minister Jerome Kennedy said in a statement.

“We are optimistic that the development of Hebron will lead to further offshore opportunities and additional developments in the future.’’

Hebron is in the Jeanne d’Arc Basin, about 350 kilometres southeast of St. John’s, N.L., and 32 kilometres further offshore than the Hibernia oilfield.

Partners led by ExxonMobil Canada include Chevron Canada, Suncor Energy, Statoil Canada and provincial Crown corporation Nalcor Energy.

The province acquired a 4.9 per cent equity stake in the venture after a battle over revenue sharing between former premier Danny Williams and ExxonMobil.

The company, one of the world’s largest oil producers and a major player in Canada’s energy industry, said it would use its expertise in Arctic development to operate in the challenging environment surrounding Hebron.

Construction of the gravity-based structure for the offshore platform is under way in Bull Arm, N.L.

Fabrication of the topside structure is expected to begin later this year, the company said.

The federal and provincial governments gave their approval last May.

The field is the second largest discovery in the province’s offshore, second to Hibernia

News from © Canadian Press Enterprises Inc., 2012

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