Flag day: as a deal is finally struck over the Hebron development
New deal sees Hebron off starting blocks
US supermajor Chevron has sealed a deal with the government of Newfoundland & Labrador, allowing work to start on the C$6 billion (US$5.7 billion) Hebron heavy oil development, off the Canadian province.
Under the agreement between the Chevron-led venture and the province, the Newfoundland & Labrador government will take a 4.9% stake in the project via its energy corporation.
The province has also negotiated major local industrial and employment benefits and a super royalty regime of a further 6.5% on net revenues whenever monthly average oil prices exceed US$50 West Texas Intermediate after net royalty payout occurs.
Hebron lies 340 kilometres off the Newfoundland & Labrador coast in 92 metres of water. The field, discovered in 1981, is expected to be developed using a gravity-based structure with integrated drilling and production topsides.
Hebron holds an estimated 400 million to 700 million barrels of recoverable oil.
Chevron has a 26.63% stake and is operator of Hebron. The other partners are ExxonMobil (36.04%), Petro-Canada (22.73%), StatoilHydro (9.7%) and Oil & Gas Corporation of Newfoundland & Labrador (4.9%).