NOIA president Robert Cadigan: 'We're reading the tea leaves like everybody else, and it looks good.' (CBC)

A formal deal between oil companies and the Newfoundland and Labrador government to develop the Hebron oilfield is close, and there is speculation it could be announced next week in St. John's.

The provincial government has been dropping hints that the $16 billion deal could be signed this month, and the buzz is that it could come during Premier Danny Williams's speech June 17 at the Newfoundland and Labrador Oil and Gas Industries Association (NOIA) annual conference.

However, NOIA president and CEO Robert Cadigan said Thursday that while the rumour mill is rampant, the announcement may not come that soon.

"We're reading the tea leaves like everybody else, and it looks good for the project. But timing-wise — hard to tell. I'm not expecting an announcement this week," he said.

Less than two weeks ago, Natural Resources Minister Kathy Dunderdale told the house of assembly that the government wanted a deal completed in June.

If developed, Hebron would be the fourth offshore oilfield in production east of Newfoundland. (CBC)

"The Hebron negotiations are ongoing, there's been a great deal of activity and a great deal of concentration … and we're very hopeful that they'll be done this month," she said.

The path to obtaining a Hebron deal has been a long and often confrontational one. In April 2006, Williams announced that talks to develop the field had broken off.

A key sticking point included Newfoundland and Labrador's insistence on obtaining a minority ownership stake in the project. At the time, Williams blamed U.S.-based petroleum giant ExxonMobil, which owns the largest stake in the project, for stalling it.

The Hebron project was effectively dead for more than a year. Operator Chevron Canada Resources withdrew staff and wound down planning and engineering work.

But in August 2007, the province signed a memorandum of understanding with the Chevron-led consortium.

The deal is expected to generate revenues for the province of $16 billion over the 25-year life of the project.

The federal government will receive $7 billion, Williams said when the deal was announced last year.

The deal includes a 4.9 per cent equity stake that the province will buy for $110 million.

Among the signs tipping insiders toward a pending deal is Chevron's notification to office-space tenants in St. John's that it wants its space back by September.

Chevron officials had no comment for CBC News on Thursday, but said the company may have something to say at the NOIA conference next week.