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Premier: Newfoundland insists on equity stake Target Canadian government’s 8.5 percent in Hibernia; proposed Hebron-Ben Nevis venture, Laurentian and Orphan basis also on list Gary Park Petroleum News Canadian Contributing Writer
Now that offshore Newfoundland has 400,000 barrels per day of production in its sights, based on hopes of a fourth producing field and the outlook for two new basins, the province’s Premier Danny Williams wants an equity stake in the industry.
He told the Financial Post his government would like to establish a “signature piece” by taking over the Canadian government’s 8.5 percent holding in the 200,000 bpd Hibernia project, follow that with an interest in the proposed Hebron-Ben Nevis venture and ultimately have an ownership share in the Laurentian and Orphan basins.
The blunt-spoken Williams insisted his province wants a “fair return” from its offshore.
If companies are not interested in developing the resources on “fair and reasonable grounds, then … go away and come back at some future time when you are prepared to give us a fair share.”
He said the equity interests would be held by Newfoundland Labrador Hydro Corp, modeled along the lines of Norway’s Norsk Hydro.
Williams said Hibernia is now a “very profitable” venture for its owners, Terra Nova is “going very well,” and White Rose was completed ahead of schedule and under budget, so we are saying: “Let’s have a share of the wealth.” Producers: thumbs-down Brian Maynard, vice president at the Canadian Association of Petroleum Producers, delivered a prompt thumbs-down to Williams’ argument, saying the relationship with the province has lacked “understanding and appreciation of the challenges associated with offshore oil development.”
He said the government does not have the expertise, technical skills or competence to add value to a project and its cash is not needed.
Williams said that if rumors of a possible 300-million-barrel find south of Hibernia are confirmed as a new field a new fiscal regime would be applied to the discovery.
To date, however, Hibernia operator ExxonMobil says speculation of a major strike is premature.
He also said a royalty deal needs to be developed if the Hibernia-Ben Nevis project goes ahead, while the potential for offshore natural gas is “huge” as companies such as Husky Energy, Petro-Canada and ExxonMobil evaluate the prospects. Nova Scotia optimistic about Deep Panuke On another Atlantic Canada front, Nova Scotia Premier John Hamm expressed strong optimism that the Deep Panuke gas project will proceed.
He anticipates that negotiations with operator EnCana on fiscal and regulatory terms will succeed, he said, following a meeting in Calgary with executives of the Canadian independent.
“There is a project there … and somebody will develop it,” Hamm said.
He is also optimistic that in the years to come further Nova Scotia resources will be uncovered.
For now, the best hope of a breakthrough for Deep Panuke hangs on the exploration well being drilled by EnCana and Marauder Resources East Coast in the Deep Panuke exploration license.
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