N.L. offshore industry waits for Hebron spinoff bonanza

The offshore supply industry in Newfoundland and Labrador is encouraged and hopeful about the new negotiations on the Hebron offshore oil project.

Jerry Byrne, president of D.F. Barnes, an offshore equipment manufacturing company, told CBC News that after the 16-month stalemate between the province and oil companies, his industry is looking forward to the local business boom that will happen when the $3 billion to $5 billion project gets the go-ahead.

"You are looking at in excess of hundreds of engineers possibly looking at renting space, purchasing goods and services, paying taxes; you got construction, fabrication-related jobs in Marystown, Bull Arm and rural communities," Byrne said. "You got marine logistics, offshore supply vessels coming and going in the tune of about a billion dollars in the project … you're looking at opportunities for repair facilities like D.F. Barnes. We're just looking for some crumbs off the table for a project of this size."

Byrne said Hebron would provide at least 3,300 jobs in the first three to four years.

Rob Strong, an oil and gas consultant in St. John's, said it is critical the Hebron project go ahead soon, in order to maintain the momentum in the offshore industry, and to ensure that local businesses are available for project support.

"We're seeing a loss of manpower and a loss of expertise and we're seeing competing projects come along," Strong said. "When you talk about the fabrication facilities in Newfoundland, a project such as Hebron will have to compete with Lower Churchill, Voisey's Bay, may have to compete with a new refinery, so it's critical to get this project going now so these facilities can be made available for this project."

Newfoundland and Labrador Premier Danny Williams confirmed last week that formal negotiations between the province and the oil consortium of companies set to develop the project had resumed, but has remained tight-lipped about how talks are progressing.

Negotiations on developing the Hebron field broke off in the spring of 2006, when the consortium, led by Chevron Resources Canada, would not agree to the provincial government's insistence on taking a 4.9 per cent ownership stake in the project.

In return, the consortium had been seeking tax breaks.