Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Regulators approve Hebron offshore oil project Add to ...

Federal and provincial regulators have conditionally approved development of the Hebron oil project off Newfoundland, a field estimated to hold just over 700 million barrels worth an estimated $20-billion over 30 years.

The Canada-Newfoundland and Labrador Offshore Petroleum Board approved Thursday an application by a group of oil companies led by Exxon Mobil Corp. , subject to 16 conditions. They include requirements for plans to deal with skilled labour shortages and environmental issues.

More related to this story

Absent from that list is any demand for action on repeated calls from offshore union leaders for improved helicopter safety, particularly choppers that can run dry for 30 minutes without oil in the main gearbox.

Federal regulations don’t require a 30-minute run-dry capability despite a recommendation from the Transportation Safety Board after the crash of Cougar Flight 491 killed 17 people in 2009.

“We’re all for it,” CEP union leader Brian Murphy, representing Hibernia and Terra Nova workers, said of the Hebron project. “But we would like to see the ultimate in safety.

“We’ll be continuously fighting for improvements in safety on [helicopters]and we’ll be continuously bringing up the concerns of workers,” he said.

The board gives the development partners 60 days to provide it, along with provincial government departments, labour groups and training schools, an update on worker needs for construction and upfront engineering.

“This information is to explicitly include the planned labour forecast for each project phase by skilled trade and identify the projected timing of any labour shortage,” says the board’s decision.

The Hebron field, about 340 kilometres southeast of St. John’s, is expected to draw first oil around 2017 if the provincial and federal governments both approve.

Partners led by Exxon Mobil include Chevron Corp. , Suncor Energy Inc. , Statoil ASA of Norway and provincial Crown corporation Nalcor Energy. The province has a 4.9 per cent equity stake.

A report by the Hebron Public Review Commission released in February said the project could generate $20-billion for the province over 30 years. It’s considered crucial to offset waning production at other offshore oil installations responsible for about one-third of Newfoundland and Labrador’s revenues.

But the review commission stressed that Hebron may be competing for labour with other megaprojects, including the planned $6.2-billion Muskrat Falls hydroelectric development in Labrador. It also called for clearer commitments on ensuring environmental safety and giving local contractors a fair shot at landing deals.

Conditions announced Thursday give the development partners 60 days to offer the “service and supply sector” detailed information about contract opportunities.

Within 90 days, the board requires a project-wide policy geared to ensure “bid packages are scaled to enable the participation of Canadian companies” with first crack given to local industry.

The conditions set out a range of environmental requirements, including a report on the technical and economic feasibility of designing Hebron to reduce greenhouse gases and other air pollution. That issue is to be re-evaluated every three years after first oil.

The Hebron Public Review Commission report noted that extracting and processing the heavy oil found in the Hebron field – other sites off Newfoundland produce lighter crude oil – will use more water that will then have to be treated.

Thursday’s board decision requires that design of the production platform include capability for installing equipment for “re-injection” of produced water to lessen discharges, along with a protocol for reporting surface sheens.

Follow us on Twitter: @GlobeInvestor

 
  • XOM-N
  • CVX-N
  • SU-T
Live Discussion of XOM on StockTwits
More Discussion on XOM-N
Live Discussion of CVX on StockTwits
More Discussion on CVX-N
Live Discussion of SU on StockTwits
More Discussion on SU-T

Topics:

In the know

Most popular video »

Highlights

More from The Globe and Mail

Most Popular Stories