BUSINESS/ECONOMY

The promise of Hibernia

MARC CLARK August 12 1985
BUSINESS/ECONOMY

The promise of Hibernia

MARC CLARK August 12 1985

The promise of Hibernia

BUSINESS

Newfoundland Premier Brian Peckford was clearly delighted— and relieved. For five years he had struggled to persuade five oil companies to build a concrete drilling platform to service the massive Hibernia oilfield in the Atlantic Ocean, 200 miles off Newfoundland’s coast. The companies, led by Mobil Oil Canada Ltd. of Toronto, argued that two floating steel platforms would be just as economical—but they would be built outside the province. Last

week a buoyant Peckford announced that Mobil had agreed to build a concrete platform. The payoff for Newfoundland: thousands of jobs and a $1-billion share of $5 billion in construction costs. Said Peckford, who has staked his career on bringing the bounty of Hibernia to Newfoundlanders: “You had to pinch yourself. ‘Finally, Brian boy, you’re going to bring home some of the promise that you’ve talked about so long and create some jobs for Newfoundlanders.’ ” Mobil denied that political pressure affected its decision. “You don’t invest that kind of money for political reasons,” said a Mobil spokesman in St. John’s who requested anonymity. “A concrete platform was chosen because of economic and technical considerations.” But Peckford, who last year said he would accept a smaller tax bite from Hibernia if Mobil opted for a concrete platform, suggested last week that the decision could affect continuing negotiations with the oil companies and Ottawa over how to split revenue from the esti-

mated 500 million to 800 million barrels of oil in the field. Any breaks given to the oil companies, said Peckford, “will be balanced off against the jobs and industrial benefits.”

If talks over royalties proceed smoothly, the platform could be under construction by late 1986 and pumping oil by 1992, Mobil said. The task amounts to nothing less than construction of a manmade island. Mobil will build the platform at four Newfoundland locations

—Marystown, Argentia, St. John’s and Come-By-Chance. When completed, it will be towed offshore and sunk in about 265 feet of water. There it will pump as many as 150,000 barrels of oil a day from almost 100 wells drilled in the seabed. Crude oil stored within the massive structure would be shuttled to refineries by tankers. As for icebergs—a frequent problem in the area—Mobil insisted that they pose no threat to the platform. “It is a massive island of concrete,” said the Mobil spokesman. “We would not put it out there if we did not think it could stand up.”

The final design is slightly scaled down from earlier plans which called for a crew of 1,150 on the platform and at a support base onshore. Even so, for Peckford it was a welcome victory in what he called the province’s “struggle to gain its say in the development of its offshore resources.”

RANDOLPH JOYCE

-MARC CLARK with RANDOLPH JOYCE in St. John’s