Much more oil than previously thought off Newfoundland's shores

A dramatic boost in the estimated size of offshore oil resources should strengthen Newfoundland's hand in getting the stalled Hebron project back on track, Natural Resources Minister Ed Byrne says.

Revised estimates released by the Canada-Newfoundland Offshore Petroleum Board show that the combined fields on the Grand Banks appear to hold 2.751 billion barrels of oil up 696 million barrels from previous estimates.

Byrne said the estimates could help the Newfoundland and Labrador government negotiate a richer royalty regime with the partners who want to develop the Hebron field.

The petroleum board confirmed Thursday that Hebron looks to contains 731 million barrels of recoverable oil up by 317 million barrels from previous estimates.

"We believe it strengthens our hand," Byrne said.

"It just demonstrates how world class our resources are. It just demonstrates, you know, how significant in terms of recoverable resources are out there."

Talks on the Hebron project collapsed in April, with Premier Danny Williams accusing minority stakeholder ExxonMobil of persuading the other partners to reject the province's demands for a higher royalty regime and an equity stake.

• FROM APRIL 3, 2006: Hebron shelved; Williams takes aim at Exxon

While the petroleum board's revision marks a change in the official size of Hebron, the provincial government has for months estimated its holdings at about 700 million barrels.

Byrne said the figures bolster the province's view that it is entitled to a better royalty package on Hebron than had been negotiated on the basis of the earlier understanding of its size.

"It's encouraging news, to say the least," he said.

Hibernia significantly larger: board

Meanwhile, the board's revision on Hibernia reflects a benchmark change that had already been made within the industry.

The board's statement set the size of Hibernia the first of three fields now in production on the Grand Banks at 1.244 billion barrels, an official increase of 379 million barrels from the last official estimate.

However, Petro-Canada which holds a stake in Hibernia and is the operator of the Terra Nova field revealed in January that Hibernia held about 1.2 billion barrels a figure that is significantly larger than had been reported for years.

• FROM JAN. 30, 2006: Hibernia size boosted, as eyes move to south field

The change means that Hibernia is now expected to continue in production until about 2030.

When Hibernia's owners negotiated a royalty regime with Newfoundland and Labrador, the Hibernia field was estimated at 615 million barrels, or about half the current official count.

Discovered in 1979, Hibernia did not produce oil until 1997. Its launch kick-started the offshore oil industry, with Terra Nova moving into production in 2002. The White Rose field pumped its first oil in 2005.