The production life of the Hibernia field is taking another step with the approval of the operator�s request to proceed with the drilling of the AA blocks � a pool of oil estimated to contain more than 48 million barrels of oil.

"The Hibernia proponents now have authorization to proceed with the development and we look forward to production from AA blocks," said the Honourable Kathy Dunderdale, Minister of Natural Resources. "We announced the successful negotiation of a binding royalty agreement in June that will provide for royalty of 42.5 per cent of net revenue on every barrel produced from this area. This development means more oil and more revenue for all involved and it is a positive step in the continued production of the Hibernia field."

The Canada-Newfoundland and Labrador Petroleum Board (C-NLOPB) approved the application from the Hibernia Management Development Company (HMDC) to develop the AA blocks. This is a fundamental decision requiring the approval of the provincial and federal ministers. Minister Dunderdale has reviewed and approved the board's decision, as required under the Atlantic Accord Implementation Acts. The federal minister has approved as well.

The AA blocks are part of the main Hibernia field and are contained within the existing Production Licence (PL-1001). The oil from the AA blocks will be developed from the existing Gravity-Based Structure.

"Hibernia is the project that put us on the map as a world-class oil producer and the continued success of this development, as well as our two subsequent developments, shows the world that we are indeed in the oil business and a good place to invest," said Minister Dunderdale. "We look forward to receiving the development plan application for the Hibernia Southern Extension and the continued growth and success of this project."

For more information on the approval of the development plan application for the AA blocks, please visit the C-NLOPB website at www.cnlopb.nl.ca/