Hebron megaproject gets qualified endorsement

The planned Hebron oil project off Newfoundland's east coast received the endorsement Tuesday of an official review, although oil companies were told to make "significant" improvements to the benefits plan.

Commissioner Miller Ayre, a retired St. Johns businessman who was appointed to review the multi-billion-dollar application from ExxonMobil and its partners, also called for improvements in the safety plan for what is scheduled to become the fourth oil field to go into production off Newfoundland. [MORE:Read the full text of Ayre's report here.]

Ayre said the Hebron project must ensure that the helicopters it uses meet international standards for safety.

That issue has become critical in Newfoundland and Labrador's oil industry since the March 2009 offshore crash that killed 17 people on a Cougar Helicopters flight.

Ayre said the 64 recommendations in his report can all be achieved, and that issues he raisedincluding such environmental factors as discharged watercan be resolved.

Ayre had been appointed to review the project by the Canada-Newfoundland and Labrador Offshore Petroleum Board, a joint federal-provincial body that regulates the oil industry.

Ayre said the benefits plan is deficient in many aspects, and noted particularly the labour capacity studies for the project. Ayre noted that there is already a shortage of skilled labour available in Newfoundland and Labrador.

ExxonMobil hopes to deliver first oil at the Hebron field in 2017.

Newfoundland and Labrador reached a development deal with the Hebron partners in 2008 that will give the province a 4.9-per-cent equity stake, as well as a voice at the management table. At the time, the government said Hebron would generate 3,500 jobs during construction and production, and be worth about $20 billion in royalties and other revenues during the life of the project.

The Hebron-Ben Nevis field is located between the existing fields of Hibernia, Terra Nova and White Rose.

Memorial University economist Wade Locke, in a presentation to the review commission last fall, found that Hebron will account for about 55 per cent of Newfoundland and Labrador's oil production from 2017 to 2037.