Newfoundland and Labrador Premier Danny Williams says he will fight two oil companies in court, if necessary, over a requirement that they spend proceeds of offshore oil earnings on research.

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Danny Williams said he was disappointed that two oil companies are preparing to sue over a requirement that they spend money on research and development. ((CBC))

Exxon Mobil Corp. and Murphy Oil have given 90 days' notice that they plan to sue Canada under the North American Free Trade Agreement for as much as $50 million in damages.

The companies say a requirement by a federal-provincial regulator to spend part of their earnings on research and development in Newfoundland and Labrador violates NAFTA.

"I'm disappointed in them," Williams told reporters Thursday.

"Research and development is really very important to our province, it's very important to the industry, and I'd like to think they'd want to be positively contributing to that," he said.

"But, you know if they don't, then we'll certainly fight them all the way in court, that's for sure."

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Liberal Leader Gerry Reid questions the quality of relations between the provincial government and oil companies. ((CBC))

Exxon Mobil and Murphy Oil are members of the consortium that developed Hibernia, the first of three oil fields off Newfoundland's east coast to go into production.

Exxon Mobil, which also has a minority stake in the Terra Nova field, has the greatest stake in the pending Hebron megaproject.

Liberal Leader Gerry Reid, who is fighting Williams on the campaign trail for an Oct. 9 election, said he found it odd that Exxon Mobil would announce its lawsuit soon after Williams announced a tentative deal on Hebron.

"This surprises me," Reid said.

"If everything is hunky dory with the oil companies and the province, then why are they doing this at this point in time?"