Nfld. & Labrador

A crown jewel for ExxonMobil: Hibernia a quiet workhorse in N.L.'s offshore

The Hibernia platform is scheduled to reach a milestone next year by producing one billion barrels of oil in Newfoundland's offshore.
The Hibernia oil platform was anchored to the seabed in Newfoundland's offshore 19 years ago this week, and is scheduled to produce its one billionth barrel of oil in 2017. (CBC)

When it comes to headlines, Hibernia has been overshadowed by Hebron in recent years.

But Newfoundland and Labrador's first producing offshore oil field continues to quietly set new milestones for production and longevity, with a significant benchmark — one billion barrels of oil produced — expected to be reached next year.

The Hibernia platform was installed on the seabed 315 kilometres southeast of St. John's 19 years ago this week, and was expected to be coming to the end of its lifespan around this time.

But satellite fields, including the Hibernia South Extension, have significantly increased oil reserves, and production is now expected to continue for another 15 to 20 years, which is good news for the operators, the province, and the employees.

"It has been a world class project," Alex Guiscardo, president of ExxonMobil Canada, told CBC News.

Sun rises on Hibernia

Hibernia blazed a trail for the province's offshore industry, and is expected to continue doing so for a long time to come.

It's value was highlighted in St. John's Wednesday, with Guiscardo describing Hibernia as a crown jewel.

"I like to think the sun rises on the east coast of Canada on Hibernia and hopefully will continue to produce for a long time," Guiscardo said following his speech to those attending an event hosted by the Atlantic Provinces Economic Council.

Alex Guiscardo is the president of ExxonMobil Canada. (Terry Roberts/CBC)

ExxonMobil is the lead owner of Hibernia, and the world's largest publicly traded oil and gas company.

Guiscardo credited engineers and geoscientists, using the latest in technology, for allowing those extra oil reserves to be found and produced.

"I hate to use the term crown jewel, but certainly it's an investment that is providing good returns for the corporation and also adding a lot of value to the province in terms of jobs and sustaining an industry and a presence here," he said.

A shake-up in drilling?

Indeed, Hibernia spinoffs are noteworthy.

According to a 2015 benefits report filed by the Hibernia Management and Development Company (HMDC), there were 2,460 people employed on Hibernia operations at the end of last year, and 82 per cent of those were residents of Newfoundland and Labrador.

That number has declined by about 360 positions in recent months, according to HMDC's latest quarterly report, but remains high from a historical perspective.

Up to the end of 2014, the provincial government reported that the value of oil produced at Hibernia had exceeded $63 billion.

The decline in job numbers, meanwhile, is not surprising.

The collapse in oil prices in 2014 forced companies to streamline operations, and capital spending tanked in 2015.

Job losses on Hibernia can also be attributed to a decision by the operator to temporarily shut down the platform's two drill rigs for upgrades that are expected to last until the end of this year.

Another shake-up is expected soon, with Hibernia expected to award a new drilling operations and maintenance support contract any day.

That contract has been held by Paragon Offshore — formerly known as Noble Drilling — for many years, but industry insiders say KCA Deutag is the frontrunner.

KCA Deutag won a similar contract for the Hebron Project, which is under construction and scheduled become the province's fourth producing oil field late next year.

ExxonMobil is the operator for Hebron, and sources say having the same drilling contractor on both platforms makes good business sense.

The Hebron project, a $14-billion oil platform scheduled to begin pumping oil in Newfoundland's offshore in 2017, is now 80 per cent complete. (Sherry Vivian/CBC)

So what's next for ExxonMobil in Newfoundland's offshore?

The company continues to invest heavily into exploration, and was the successful bidder on six offshore licences in recent years, encompassing 1.5 million hectares.

Guiscardo said the company is carrying out seismic work in hopes of finding "drillable opportunities."

When asked if ExxonMobil might be spearheading yet another producing field in the offshore sometime in the future, Guiscardo said "that's certainly our hope," but any such decision will depend on the success of exploration, and economics. 

"We are very interested in this area, as evidenced by the fact we continue to invest in the leases," he said.

About the Author

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