Completion of the Hibernia oil field development project off Newfoundland will be delayed 1 year or more by withdrawal of Gulf Canada Resources Ltd. as a partner.
Norman McIntyre, chairman of the Hibernia group executive committee, said construction work on the project will be halted. The decision will cut spending to $1.5 million/day from $3 million/day and mean layoff of as many as 600 workers.
A work camp at Bull Arm on the east coast of Newfoundland is near completion. Work was scheduled to begin soon on the concrete gravity base for Hibernia's production platform. The field is scheduled to produce 110,000 b/d for 18 years.
The delay was disclosed after a Feb. 14 meeting between the remaining partners and Canadian Federal Energy Minister Jake Epp. Hibernia production will begin in 1997 instead of November 1996 as originally planned.
WHAT'S LEFT
Gulf withdrew as a 25% partner this month and said it could no longer afford to spend a major part of its capital budget on one project. Remaining partners in the $5.2 billion (Canadian) development program and Ottawa say they will continue with Hibernia and seek new partners (OGJ, Feb. 17, p. 29).
The remaining partners are Mobil Oil Canada Ltd., Petro-Canada, and Chevron Canada Resources Ltd. The federal government has said it will not increase its $2.7 billion commitment to Hibernia in cash and loan guarantees.
Chevron denied reports it plans to withdraw from Hibernia. A company spokesman said Chevron is committed to going ahead, is looking for a new partner, and is anxious to get the project going.
Gulf, committed to continue with the project for as long as 8 months, continues efforts to sell its interest. The company's investment in Hibernia, including current commitments, is expected to be about $300 million.
Petro-Canada also has been seeking a buyer for an undisclosed share of its 25% interest.
Epp said about $2 billion in contracts have been let for Hibernia. Another four contracts worth about $400 million were to be awarded this spring.
Copyright 1992 Oil & Gas Journal. All Rights Reserved.
