Companies proposing the Hebron oil project east of St. John's say the development of the offshore oil production platform, and drilling to 2024, will cost a whopping $8.3 billion dollars.

In an application submitted to to the Canada-Newfoundland Offshore Petroleum Board on April 15, the projects proponent said the cost of operating the project until 2046 will be an additional $5.8 billion.

It's estimated the pre-production costs of building the gravity based structure and topsides – the drilling platform structure – will cost $4.5 billion alone.

The Hebron project development area is about 350 kilometres from St. John's, and about 32 kilometres southeast of the Hibernia oil development project.

ExxonMobil Canada Properties is leading the development with partners Chevron Canada Limited, Petro-Canada Hebron Partnership, Suncor Energy Inc., Statoil Canada Ltd. and a division of Crown-owned Nalcor Energy. 

N.L. owns minority stake

Through Nalcor, the Newfoundland and Labrador government has a 4.9 per cent equity stake in the Hebron property, a hard-won share that former premier Danny Williams had insisted on obtaining during negotiations with the other partners.

The stake cost Newfoundland and Labrador $110 million.

In 2008, Newfoundland and Labrador estimated that it expected to earn $28 billion, with $20 billion in royalties alone. The estimate was based on oil trading on average at US $87 per barrel.

Hebron, which was discovered in 1981, will become the fourth field off Newfoundland to go into production, following Hibernia, Terra Nova and White Rose.

Income from the offshore oil industry now accounts for one third of the Newfoundland and Labrador government's overall revenues.