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Danny turns peacemaker Newfoundland premier pays tribute to industry he scorned, hoping formal talks will soon restart on abandoned project Gary Park For Petroleum News
A move to establish “peace in our times” is coming from the unlikeliest source — Danny Williams, premier of the Canadian province of Newfoundland.
Acknowledging the contributions of companies who make Newfoundland’s offshore oil industry “tick” — the same companies whose leases he has threatened to seize unless they started developing their finds by a set deadline and accused of negotiating in bad faith — Williams has undergone a change of heart.
Speaking to the annual conference of the Newfoundland Ocean Industries Association or NOIA — relabeled “Annoy-a” by Williams last year — he said efforts are under way to revive the Hebron-Ben Nevis project, 15 months after negotiations on fiscal and regulatory terms collapsed.
It was a more conciliatory Williams who took to the podium on June 19.
“I want to say, with all sincerity, that I am very, very, very optimistic about the future of our province’s oil and gas industry and I do appreciate the contributions of the companies who make the industry tick,” he said.
“And though there have been issues of concern on both sides, there are ways to work through them and I believe that we are all sincerely committed to do just that.”
Williams optimistic negotiations will resume As proof of the thaw in chilly relations, he said there is a “true cause for optimism” that formal negotiations on Hebron-Ben Nevis can resume now that the two sides have exchanged information following a “brief but necessary hiatus.
“The companies are sharing concerns over costs, which are increasing around the world,” Williams said.
“They are also updating us on possible scheduling opportunities … and at the same time we are continuing to share our thoughts on such issues and equity and royalties.”
He did not make specific reference to recent statements he and Natural Resources Minister Kathy Dunderdale have made, demanding an equity stake of “more than 5 percent” in all future offshore ventures.
Chevron: no formal negotiations The immediate response from the Hebron-Ben Nevis consortium was measured.
Dave Pommer, a spokesman for the operator, Chevron Canada Resources, told Petroleum News that “no formal negotiations are taking place” and would not speculate on what might be in store.
However, he said the “lines of communication are open,” adding “we would like to proceed with the project at some future date.”
The partners are Chevron Canada 28 percent, ExxonMobil 37.9 percent, Petro-Canada 23.9 percent and Norsk Hydro 10.2 percent.
Petro-Canada Executive Vice President Peter Kallos told a Calgary conference June 18 that the consortium is “in the middle of restarting discussions,” although it is too early to say what impact the province’s new energy plan might have on the outcome.
But “we’re hoping Hebron will go forward,” he said.
Hebron-Ben Nevis pegged at C$11B When negotiations broke down last spring and the project team was disbanded, Hebron-Ben Nevis was a possible C$11 billion development to bring 100,000 barrels per day on stream about 2012 by tapping a 731 million barrel reservoir.
At the time, the Newfoundland government made an 11th-hour demand for a 4.9 percent ownership position and has since said that, when a new energy plan is released this summer, it will raise that bar above 5 percent.
Dunderdale even suggested it would be in the best interests of the Hebron-Ben Nevis partners to return to bargaining before the new energy plan is unveiled.
For now, the biggest development is the change of attitude by Williams which NOIA President Ted Howell said signaled a return of “optimism and confidence” to the industry.
He said Williams shares some ideas with NOIA “that will go a long way towards achieving” the conference goal of “building a strong, competitive industry” — an objective that industry leaders had warned was in danger of going into reverse following the collapse of Hebron-Ben Nevis negotiations.
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