Chevron to step aside as Hebron operator
The company that was to be the lead operator of the Hebron offshore oil deal in Newfoundland and Labrador is expected to change.
Chevron Canada, with a 28 per cent stake in Hebron, was the project's designated operator, but news came Thursday that it has stepped aside and ExxonMobil Canada will now take the lead.
ExxonMobil has, at 37.9 per cent, the greatest ownership stake. Petro-Canada, and Norsk Hydro Canada Oil & Gas are the remaining partners.
Tim Murphy, spokesman for Chevron, told CBC News that ExxonMobil, as operator of the Hibernia offshore oil field, can use its experience working in Newfoundland and Labrador to lead the Hebron project.
Murphy said Chevron wants to shift its focus to exploring the Orphan Basin for more oil, beginning in 2009. He said ExxonMobil will take over as lead on the Hebron project in the near future.
Bob Cadigan, president and CEO of Newfoundland and Labrador Oil and Gas Industries Association (NOIA,) said the change in operators will not affect the Hebron agreement, which was signed Wednesday.
"Its just simply a matter of the partners making decisions for business reasons in terms of who'll take the lead," Cadigan said. "So whether it's ExxonMobil or Chevron, the same activities, the same timelines, everything should remain the same."
Hebron, located 350 kilometres offshore in the Jeanne d'Arc basin, is estimated to have 400 million to 700 million barrels of resources. The Orphan Basin is a largely unexplored area located about 325 kilometres offshore.
Williams has history with ExxonMobilThe Hebron deal came almost exactly one year after a memorandum of understanding was signed, and after several years of negotiations that were shelved in April 2007 for a period.
When brakes were hit on the negotiations, Premier Danny Williams blamed the impasse on ExxonMobil, saying at the time he believed the company did not want to develop the project.
However, in his speech during the signing ceremony Wednesday, Williams joked about the public feud.
"And all those mean, tough things I said, I was just kidding," Williams said. "Together we have been partners in adversity. Let us also be partners in prosperity."
The $6-billion deal to develop the offshore oil field is expected to bring at least $20 billion in royalty revenues to the Newfoundland and Labrador government. The province purchased a 4.9 per cent equity stake in the oil field for $110 million.
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