February 17, 2000
(Mines and Energy)

Decision on proposed Hibernia production increase

The Hibernia Management and Development Corporation (HMDC), in accordance with the provisions of the Hibernia Development Plan, has made formal application to the Canada-Newfoundland Offshore Petroleum Board (C-NOPB) to increase the authorized processing capacity of the platform, to increase the daily rate of production, and to increase the annual production limit from the Hibernia field.

The HMDC request proposed increasing the facility maximum daily rate from the current limit of 150,000 barrels a day to 180,000 barrels a day immediately, and a further increase to 200,000 barrels a day following the completion and testing of equipment modifications in March. The HMDC proposal also sought an increase in the annual production limit from the current level of 50 million barrels to 66 million barrels.

The C-NOPB professional staff conducted a thorough technical review of the HMDC proposal to determine the feasibility of increasing the facility maximum daily rate which governs the safe operable limits of the platform, including such considerations as relief, blow-down and flare systems, piping and equipment vibration and noise, cavitation, corrosion and erosion parameters.

Based on the technical report, the board has decided that the facility maximum daily rate at the Hibernia platform may be increased immediately to 180,000 barrels a day, and to a limit of 200,000 barrels a day once the equipment modifications are completed to the board's satisfaction in March. This will allow for greater flexibility in daily production levels, within the facility maximum daily rate, on the platform.

With respect to the requested increase in the annual oil production limit from 49.5 million barrels to 66 million barrels, any decision on such an increase in the depletion rate of the Hibernia field would constitute an amendment to the Hibernia Development Plan, and therefore would be a fundamental decision as provided for in the Atlantic Accord Acts. In accordance with this legislation, the C-NOPB has given notice of its decision relating to this aspect of the HMDC proposal to the federal and provincial energy ministers.

Under the acts, the ministers have 30 days from receipt of the C-NOPB Decision Report to approve or disapprove the board's decision. During this period, HMDC has the flexibility to operate within the new facility maximum daily rate as approved, but not to exceed the current annual production limit of 49.5 million barrels.

Media contact: Hal Stanley, Chief Executive Officer, (709) 778-1456.

2000 02 17                                                                 12:05 p.m.