A new deal to expand the White Rose oil field off Newfoundland's east coast will mean billions of dollars of extra revenue, Premier Danny Williams says.

Williams announced the expansion in September, noting that the project will give the Newfoundland and Labrador government a five per cent equity stake.

Premier Danny Williams says a super royalty and an equity stake could amount to an extra $6 billion in provincial revenues.
(CBC)

On Monday, operator Husky Energy, partner Petro-Canada and the province finalized a deal to oversee three satellite fields by the existing White Rose field. The expansion could start producing oil by late 2009.

Williams said financial gains will come from a super royalty — an enhanced benefit that kicks in when West Texas Intermediate crude trades higher than US $50 per barrel after payout of base costs.

"This project could be worth more than $6 billion to the people of the province," Williams told reporters Monday.

Ruud Zoon, Husky's vice-president of east coast operations, said the expansion could extend the life of the overall White Rose project by five years.

The three expansion areas include recoverable amounts of 214 million barrels of oil. The main field, the third to go into production on the Grand Banks southeast of St. John's, holds reserves approaching 250 million barrels.

Husky owns a stake of almost 69 per cent in the expansion, with Petro-Canada owning slightly more than 26 per cent. The province owns its share through an energy corporation.

The capital costs of the expansion are about $3.5 billion.

Earlier this year, Williams unveiled a new energy plan that includes a commitment to seek a similar equity stake in future energy projects.