The Hibernia offshore oil production platform is located 315 kilometres east-southeast of St. John's.

Newfoundland and Labrador's government estimates the province will collect $13 billion in revenue from the offshore South Hibernia oil development.

That's $3 billion more than the province forecast when it reached a tentative agreement with oil companies last June.

"We have reached the final agreements that will see the development of the Hibernia Southern extension," said deputy premier Kathy Dunderdale at a news conference Tuesday. "We will sign the formal documents that will deliver approximately $13 billion to the province over the life of this project,"

The government said the increase in revenue would come from higher than predicted oil prices over the term of the project and lower than expected startup costs.

The Hibernia oil project is expanding to include new reserves in an area known as Hibernia South, which holds another 170 million barrels of oil.

Newfoundland and Labrador's government is spending $30 million to buy a 10 per cent equity stake in the project.

The oil companies involved in the project have also agreed to pay a super royalty of up to 50 per cent if oil prices reach $70 US per barrel.