350 kilometers off this coast lies Canada’s greatest offshore oil assets. It’s Newfoundland, it’s rugged, it’s powerful and it’s where thousands of oil and gas people live as their second home. The Jeanne d’Arc Basin of the Atlantic Ocean is a playground for seafaring pioneers and courageous aviators. It houses one of the world’s largest oil platforms, known as Hibernia; it also boasts mega-oil projects such as Terra Nova and White Rose. Hebron is the next offshore project to come on stream with first oil expected before the end of 2017.
With about 1,200 people presently working on the Hebron Project in Newfoundland and Labrador (the first people starting work on the project in 2008), the project was fully and officially sanctioned by the co-venturers on December 31, 2012. Geoff Parker, Hebron senior project manager, says this decision “marks a significant milestone for the Hebron Project.”
Since inception, the project has achieved numerous milestones, and with the decision to proceed, they perceive many future victories ahead. To date, the project has prepared the Bull Arm construction site, had a comprehensive study report approved, constructed the bund wall, made significant progress in detail design, had the benefits application and plan approved, and started designing and constructing the Gravity Base Structure (GBS).
Local workers and businesses can breathe a little easier now with this news, and they can concentrate on building one of the world’s largest structures to ever be assembled and moved through the ocean. Drilling and oil production are expected to begin in 2017. With 150,000 barrels of oil to be produced per day, the yields from the billions of dollars invested (currently projected to be over $20 billion) can then begin to flow.
A Benefits Agreement ensures local companies and people will gain opportunities for business and jobs. The skills, knowledge, and infrastructure being built in Newfoundland and Labrador will be a sustainable benefit from this project, not to mention the estimated $23 billion in royalties, return on investment, and taxes generated from the project.
In October 2012, ExxonMobil and the province of Newfoundland and Labrador resolved a dispute over fabricating the third module in NL, a commitment, subject to capacity, made in the Benefits Agreement. The module will now be fabricated outside the province and ExxonMobil will pay the province $150 million. The province has committed to using the investment in education and healthcare, and it has been earmarked for specific projects.
ExxonMobil stated that the reason for fabricating the third module outside the province was due to the project schedule being too prolonged with no ability to recover if completed otherwise. With provincial labor and service supply reaching threshold levels, increasing the labor force to 3,000 – 3,500 workers for the peak construction stage might be the next big challenge of the Hebron Project. However, several capable recruiting firms are having success attracting talent to the Hebron Project to date. No doubt this challenge will result in more opportunities for enhancing skills, bringing skills home, and creating a more diverse workforce in the province.
Hebron is the second largest discovery in the province of Newfoundland and Labrador. The fact that it has been approved to progress with platform production and fabrication, and future drilling and oil production is cause for celebration.
Hebron is a heavy oil field estimated to contain a recoverable 789 million barrels of oil. While ExxonMobil manages operations, Suncor Energy, Statoil Canada, and Nalcor also have stakes in the partnership. The oilfield will be produced from a concrete Gravity Base Structure (GBS) supporting the Topsides, most of which will be constructed in Bull Arm, NL. Kiewit-Kvaerner Contractors (KKC) and WorleyParsons were awarded the Front End Engineering and Design (FEED). ExxonMobil is responsible for site preparation and has an option to subsequently award detailed engineering, procurement, and construction of the GBS.
Local companies trying to secure a contract with Hebron can learn more about the procurement process and major contracts/service opportunities here.
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