N.L. settles another dispute with ExxonMobil over Hebron project benefits

There are few details being released by the province at this point, after cabinet recently authorized the agreement.

Provincial cabinet approves agreement, but releases few details

Rob Antle · CBC News · Posted: Jun 11, 2018 4:30 AM EDT | Last Updated: June 11, 2018

ExxonMobil's Hebron oil platform leaves Trinity Bay, N.L., being towed to its drilling location on the Grand Banks in June 2017. The tow had been delayed by nearly a month due to heavy ice along the coast. (Danny Arsenault/CBC)

The Newfoundland and Labrador government has settled a dispute related to the award of a contract for the Hebron oil project, but is releasing few details about how it was resolved.

The settlement was revealed in a provincial order-in-council posted online last week.

In that order, dated May 22, cabinet authorized the minister of Natural Resources "to settle a dispute related to ExxonMobil's award of a contract for topsides and GBS mating for the Hebron oil and gas development project."

'Very, very key milestone' of Hebron project reached this week, says NOIA

Natural Resources Minister Siobhan Coady was away and not available for an interview, but the department sent CBC News a statement on her behalf.

It notes that government and the Hebron partners had "different interpretations of commitments" under the benefits agreement for the project.

The Hebron project celebrates first oil Nov. 27, 2017.

The dispute regarded "a work scope undertaken related to the barges used to transport the topsides to the deepwater site for GBS mating."

GBS refers to the gravity-based structure that sits on the ocean floor.

According to the statement, the Hebron partners "agreed to further benefits commitments that were not previously required."

The department declined to provide details on those additional benefits, or to put a price tag on any aspect of the dispute, and instead steered CBC News to the formal access-to-information process.

A government official added that the agreement has not yet been fully executed.

ExxonMobil also would not provide further details.

"The Hebron co-venturers are pleased to resolve an outstanding issue with the province of Newfoundland and Labrador," ExxonMobil spokeswoman Lynn Evans said in an emailed statement.

"We consider the details to be confidential."

Not first dispute settled on Hebron project

This is not the first time the Newfoundland and Labrador government has reached a settlement over benefits related to the Hebron megaproject.

In 2012, then-premier Kathy Dunderdale announced that ExxonMobil would pay the province $150 million in compensation instead of building a key offshore drilling equipment module at Bull Arm.

First oil was pumped at the $14-billion Hebron project in November, a month ahead of schedule.

The Hebron field is located 350 kilometres southeast of St. John's. It's estimated to hold more than 700 million barrels of recoverable resources.

The Hebron partners are ExxonMobil Canada Properties (35.5 per cent), Chevron Canada Limited (29.6 per cent), Suncor Energy Inc. (21 per cent), Equinor Canada (formerly Statoil Canada) Ltd. (nine per cent), and Nalcor Energy — Oil and Gas Inc. (4.9 per cent).