|
Hebron project gets a second chance
Gary Park For Petroleum News
A 16-month cooling off period might have done the trick — at least for Danny Williams.
The firebrand premier of Newfoundland, who is never known for ducking a debate or starting one, won’t talk about the details underlying the revival of negotiations with the Chevron Canada-led partnership backing the Hebron offshore oil project.
The best Williams will offer these days is that a “deal could be done at any time; it’s just a question of whether the parties can get over what they feel are the important points. We’ve narrowed that gap dramatically.”
Chevron is even more reserved about the announcement Aug. 9 that efforts to reach fiscal terms are back on track.
Chevron spokesman Tim Murphy told Petroleum News it would be inappropriate to comment on the issues being discussed, the status of the negotiations, or whether the consortium has a deadline in mind.
He said the partners are “committed to advancing the project … and are working very hard to reach a positive conclusion.”
Murphy would not say whether the partners are open to dealing again with the Newfoundland government’s demand last year for a 4.9 percent equity stake in Hebron and its insistence on a C$500 million hike in the province’s generic royalty rates over the project’s estimated 25-year production life.
Chevron has previously calculated the royalties at C$8 billion to C$10 billion.
The partners are ExxonMobil 37.9 percent, Chevron 28 percent, Petro-Canada 23.9 percent and Norsk Hydro 10.2 percent.
Talks at ‘delicate stage’ With talks now at a “delicate stage,” Williams is treading carefully, although he did say Newfoundland is holding out for an equity share.
“I’d prefer not to get into the details,” he told reporters in St. John’s, Newfoundland, on Aug. 11. “Suffice it to say, we, as a province, have not moved (on the 4.9 percent equity) position at all.”
Williams suggested the Hebron partners might have been enticed back to the negotiating table by the outlook for oil prices.
“I think they realize this is an attractive, stable project,” he said.
In addition, Williams said the chance for 100 percent utilization of Newfoundland’s facilities might have swayed the consortium, given that further delays might have seen that opportunity disappear.
When talks collapsed in April 2006, the plans involved an C$11 billion development cost to remove 731 million barrels of heavy crude at a peak rate of 100,000 barrels per day. The startup then was targeted for 2012.
But Chevron has since been working to update project costs as well as estimating the potential economic benefits for the Newfoundland economy.
Paul Barnes, Atlantic manager for the Canadian Association of Petroleum Producers, welcomed the resumption of talks as “positive” and a chance to revive momentum that was lost when negotiations broke down.
He told the St. John’s Telegram that other developments “more or less stalled as a result of the collapse of Hebron and the industry has been basically at a standstill since.”
| 