N.L. oil industry backs Williams over Hibernia South

In markedcontrastwith theirshowdown over one oilfield, the Newfoundland and Labrador government and local industry are on the same side regarding a new disagreement over another.

The Newfoundland Ocean Industries Association— which rebuked Premier Danny Williams for his tough stance over the proposed Hebron development— is backing Williams's government's moveto block the nearby Hibernia South field.

"The province's position [is] very reasonable," NOIA president Ted Howell told CBC News.

"We look at it as representing sound resource management principles, consistent with their position of maximizing benefits from their offshore resources."

Natural Resources Minister Kathy Dunderdale announced Wednesday that the provincial government will block Hibernia's bid to tap into an area called Hibernia South, which it officially estimates to hold about 223 recoverable million barrels of oil.

Dunderdale said the province cannot approve the development until Hibernia's partners turn over information, including details on what benefits— which would include jobs and royalties— the province could expect to see.

Dunderdale said she welcomed negotiations with Hibernia Management and Development, soundingless antagonistic thanthe government hadbeenduring the showdown over the Hebron field.

Negotiations on Hebron, which would have become the fourth field off Newfoundland's east coast to go into production, were iced last April, when Williams could not extract an equity stake from Hebron's partners. Williams blamed Hebron partner ExxonMobil for the impasse.

NOIA at the time called on the Newfoundland and Labrador government to move quickly to restart Hebron talks, and warned that local expertise could drift away without the launch of a new oilfield.

With Hibernia South, NOIA sees a better negotiating strategy with large oil companies.

"We see a more conciliatory tone," Howell said.

"We're hoping these meetings will be fruitful and reinforce our position that when there are differences of opinion, they can be best resolved by sitting at the table."

Dunderdale told reporters her government is assuring local industry that the provincial government knows what it's doing.

"Just as the industry players need certainty to do business, so does the province," she said.

"Newfoundlanders and Labradorians have entrusted their government to protect their interests on how our resources are developed, and we will not let you down."

However, Opposition leader Gerry Reid said he sees a disturbing pattern with how Williams's government is dealing with oil companies.

"He doesn't seem to be able to make a deal with anybody," said Reid, noting that Newfoundland and Labrador's population continues to decline.

"While that is occurring, we're having an exodus from this province, the likes of which we've never seen before."

The Canada-Newfoundland and Labrador Offshore Petroleum Board granted conditional approval in December to Hibernia's request to tap into Hibernia South.