Nfld. & Labrador

What became of the promised $150M in Hebron compensation cash?

The oil companies that have partnered to build the Hebron project have made good on a commitment to pay the government of Newfoundland and Labrador $150 million in compensation, with the final payment expected this week.

Final payment to government of Newfoundland and Labrador expected this week, says finance department

A Hebron topside module known as the derrick equipment set arrived at Bull Arm from Korea in November. It was the first complete Hebron module. (ExxonMobil)

The oil companies that have partnered to build the Hebron project have made good on a commitment to pay the Government of Newfoundland and Labrador $150 million in compensation, with the final instalment expected this week.

The money was part of an agreement reached in late 2012 with the former Progressive Conservative government, ending a dispute between the oil companies and the province over the amount of Hebron construction work to be carried out in the province.

The money was to be paid by June 30.

As of early June, the Hebron project was about 80 per cent complete, according to ExxonMobil Canada, the project's largest shareholder. The concrete gravity structure is shown here in the waters just off Bull Arm, Trinity Bay. (Sherry Vivian/CBC)

"All project partners have made their payments," the Department of Finance said in a statement issued late Monday afternoon.

"The total amount received to date by the provincial government is $118.4 million. However, one payment of $31.6 million to the Government of Canada is currently going through administrative processing with the transfer of funds. It is expected that amount will be received by the provincial government in the coming week."

Then-premier Kathy Dunderdale stated at the time the money would be used to help fund a new core science building at Memorial University and other, health-related, projects.

Then premier Kathy Dunderdale announced the agreement in late 2012, stipulating that ExxonMobil pay the province $150 million as compensation for awarding some construction work for the Hebron Project outside of the province.

Much of that money was freed up last month when the federal government agreed to pay $100 million for the science building — funds originally earmarked by the province.

An official in the finance department said that money will now be "considered in the context of Budget 2017/18 and 2018/19 expenditures in infrastructure."

Key work done in Korea

The compensation cash allowed the partnership, led by ExxonMobil Canada, to construct a key module for the Hebron project, the derrick equipment set (DES), outside the province.

It was built in Korea, along with another massive module, the utilities/process module (UPM).

The DES arrived at Bull arm late last year, while the UPM is now making its way from Korea aboard a vessel called the Blue Marlin, and is scheduled to arrive sometime in September.

The largest module for the Hebron Project, the 35,000-tonne utilities/process module, was constructed in Korea. It was loaded aboard a vessel called the Blue Marlin last month, and is slowly making its way to Bull Arm, Trinity Bay. It is scheduled to arrive in September. (ExxonMobil)

The concrete gravity based structure, the accommodations module, the drilling support module and several other ancillary modules are either under construction, or were built in the province, creating thousands of jobs since work began four years ago.

The project is now more than 80 per cent complete, and is expected to be towed to the Hebron oil field some 350 kilometres east of St. John's a year from now, with first oil expected by the end of 2017.

Hebron is the province's fourth major offshore oil site, and is believed to contain about 700 million barrels of recoverable oil.

About the Author

Terry Roberts is a journalist with CBC's bureau in St. John's.

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