Group restarts Newfoundland project

A partnership led by Chevron Canada Resources has cleared the way for offshore Newfoundland’s fourth producing oil field, reviving a development that was shelved three years ago.A joint operating agreement has been reached that could see the Hebron, Ben Nevis and West Ben Nevis fields come on stream in 2011 or 2012, tapping recoverable reserves of 400 million to 700 million barrels of crude with a gravity rating of 18-21 degrees API. Costs and volumes won’t be known until there is a final decision on the production system and the availability of materials.

Earlier indications have pointed to capital costs of at least C$3 billion and output of more than 100,000 barrels per day.

The partners are Chevron Canada 28 percent, ExxonMobil Canada 37.9 percent, Petro-Canada 23.9 percent and Norway’s Norsk Hydro 10.2 percent.

A deal will also have to be reached with the Canadian and Newfoundland governments over royalties and economic benefits, including research and development spending and secondary processing.

Newfoundland Premier Danny Williams has already put the companies “on notice … that we will be expecting a very, very fair return on our resources.”

He would prefer to see a fixed production platform over a floating system because of the jobs that would be created in his province.

Chevron Canada President Alex Archila said the partners are already leaning in that direction because of the improved oil flow.

—Gary Park