Executive Council
Natural Resources
January 4, 2013

Hebron Sanction Welcome News for Province

The announcement by ExxonMobil to sanction the development of the Hebron Project is great news for the province and offshore industry, and will bring significant employment and economic benefits for the people of Newfoundland and Labrador. The sanction decision ensures construction and fabrication of the platform, and commits to future drilling and production of the Hebron field.

“Our goal has been to ensure that Newfoundlanders and Labradorians are the main benefactors with respect to our natural resources, and that the development of Hebron maximizes benefits for the people of the province,” said the Honourable Kathy Dunderdale, Premier of Newfoundland and Labrador. “Hebron will support jobs, the economy and strengthens our province’s position as an energy warehouse.”

The Hebron project is estimated to return approximately $23 billion to the Provincial Government in royalties, return on investment through Nalcor Energy, and corporate income tax. Peak employment is estimated at 3,500 persons, and current estimates indicate approximately 22.4 million person-hours of employment will occur in the province.

The Hebron field, located approximately 350 kilometres southeast of St. John’s, contains in excess of 700 million barrels of recoverable resources, based on estimates of the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB). The field is the second largest discovery in the province’s offshore, second to Hibernia. The Hebron Project partners include ExxonMobil Canada Properties (operator), Chevron Canada Resources, Suncor Energy Inc., Statoil Canada and Nalcor Energy Oil and Gas.

“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,” said the Honourable Jerome Kennedy, Minister of Natural Resources. “The decision to move forward is positive for our province, and adds new major infrastructure to the Jeanne D’Arc Basin. We are optimistic that the development of Hebron will lead to further offshore opportunities and additional developments in the future.”

Two of the three modules related to Hebron will be built in Newfoundland and Labrador. These include the Drilling Support Module, which has been identified for fabrication in Marystown, and the Accommodations Module, which will be fabricated at Bull Arm. The Provincial Government reached a $150 million settlement agreement with ExxonMobil in October 2012 to resolve a dispute concerning fabrication of the third module, the Drilling Equipment Set. With the funding, the Provincial Government has identified that investments will be made to help fund the development of a new science centre at Memorial University, assist with the establishment of two new operating rooms at the Bliss Murphy Cancer Clinic in St. John’s, and support extensions to the existing long-term care facilities in Happy Valley-Goose Bay. The settlement will also provide funds for geoscience initiatives in the province’s offshore, and to support retrofit work on a papershed and building at the former Stephenville mill site. The October news release can be located at www.releases.gov.nl.ca/releases/2012/exec/1011n04.htm.

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2013 01 04                    2:45 p.m.