OTTAWA — Canada’s island province of Newfoundland last week announced a tentative deal with oil firms to significantly boost Atlantic offshore drilling in the Hibernia oil fields.
The original field, located in the Jeanne d’Arc Basin about 315 kilometers southeast of St. John’s, Newfoundland, has produced 670 million barrels to date, after nearly 12 years of production.
The Hibernia Southern Extension, where new drilling is to occur, contains an estimated 220 million barrels of oil.
Newfoundland’s government agreed to pay 30 million Canadian dollars (26.5 million US) for a 10-percent equity stake in the project, and hopes to collect 10 billion dollars (8.8 billion US) in resource royalties from the field over the coming years, said a statement.
According to a memorandum of understanding, the province’s Nalcor Energy would team up with partners ExxonMobil, Petro-Canada, Chevron, Murphy Oil, Canada Hibernia Holding Corporation and StatoilHydro on the Hibernia Southern Extension.
Discovered in 1979, the Hibernia oil field was estimated just prior to the start of production in 1997 to contain 666 million barrels of oil by the Canada-Newfoundland Offshore Petroleum Board.
That estimate has since increased to 1.244 billion barrels of recoverable oil, including the estimated 220 million barrels contained in the Hibernia Southern Extension.