Talks Restart for Canada's C$5B Hebron Oilfield Project

East Canadian Offshore Oilfields
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OTTAWA, (Dow Jones Newswires), Aug 10, 2007 (Dow Jones Commodities News)

Newfoundland and Labrador Premier Danny Williams confirmed Thursday that formal talks have restarted for the proposed offshore Hebron oilfield, Canadian media reported Friday.

Williams left early from the premiers' conference currently underway in New Brunswick for negotiations with the companies behind the C$5 billion development, the reports said.

Negotiations stalled last year after Williams insisted on a 4.9% equity stake in the project, along with a higher royalty rate for the province. The consortium had been seeking tax breaks, and in April 2006, Hebron operator Chevron Canada Ltd. disbanded its project team.

Two months ago, the premier said exploratory talks between his provincial government and the consortium had resumed, but reiterated his equity and royalty rate demands, according to the reports.

Hebron would be Newfoundland's fourth offshore development, after Hibernia, Terra Nova and White Rose, and some estimates reckon it could produce more revenue than the current three combined.

Chevron Corp.'s (CVX) Canadian arm is the project leader with a 28% share, ExxonMobil Corp.'s (XOM) Canadian unit has the majority stake of 37.9%, and Petro-Canada (PCZ) holds 23.9%. Norsk Hydro ASA (NHY) held the remaining interest, which will transfer to Statoil ASA (STO) following the merger of the two companies' oil businesses later this year.

Copyright (c) 2007 Dow Jones & Company, Inc.

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