Hebron moving ahead: ExxonMobil

Moira Baird
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Natural Resources

It's full steam ahead for the Hebron project.

That was the message from ExxonMobil's Jim Flood, who was in St. John's Wednesday outlining the company's plans to pump first oil from the province's fourth oilfield by the end of 2017.

To meet that deadline, the Hebron partners aim to submit a development application - which kickstarts a regulatory review of the offshore project - by December 2009.

ST. JOHN'S - It's full steam ahead for the Hebron project.

That was the message from ExxonMobil's Jim Flood, who was in St. John's Wednesday outlining the company's plans to pump first oil from the province's fourth oilfield by the end of 2017.

To meet that deadline, the Hebron partners aim to submit a development application - which kickstarts a regulatory review of the offshore project - by December 2009.

"The team has begun the detailed project planning," Flood said at an offshore seminar hosted by the Newfoundland and Labrador Oil and Gas Industries Association. "The oil will be produced and shipped via tankers through the existing distribution system that we use today with Hibernia.

"First oil is anticipated before the end of 2017, with a peak of about 150,000 barrels a day.

"Working in partnership with our co-venturers, we're going to look for every opportunity to safely and cost-effectively position ourselves to even deliver first oil sooner than that."

Flood says Hebron is moving ahead.

That's despite world oil prices that have plummeted 60 per cent since July and a worldwide financial crisis that has seen some oil companies delay or reduce the size of their Alberta oilsands megaprojects.

"You need to know that, with the news of the current financial uncertainties, all the co-venturers are committed to progressing this project to completion," said Flood.

"In these uncertain economic times, ExxonMobil continues to continues to do what we do best - we take a very disciplined and long-term approach to investment to achieve industry leading returns.

"We are continuing to invest at record levels to find and develop supplies of energy, and we expect to do the same with the Hebron project."

Flood also says it's too early to predict what impact, if any, low oil prices and the financial crisis will have on Hebron.

"There's no indications that the viability will be impacted at this time," he said in an interview. "I think all of us are looking to see what the impact is going to be on the market itself, drill rig prices, steel prices, all the commodities."

He declined to set a threshold for how far oil prices have to drop before Hebron's viability could be affected.

"We're not in the business (of) giving oil prices."

When Hebron was shelved in February 2002, world crude prices were in the low US$20 range. At the time, the oil companies said it wasn't economical to drill for heavy crude at those prices.

On Wednesday, crude prices were in the US$53 range.

Heavy crude makes up the bulk of the 400 million to 700 million barrels of oil estimated at Hebron. It typically fetches a lower price than the lighter crude pumped at the Hibernia, Terra Nova and White Rose oilfields.

Flood says engineering and design work for the Hebron production platform, which will use a Hibernia-style gravity base structure, will take place between 2009 and 2012.

And between 2012 and 2016, he expects detailed engineering procurement to begin and fabrication could start by 2012.

"Right now, we feel pretty comfortable with 2012 start of fabrication and we'll hit a peak around 2015."

Flood is the arctic project executive for ExxonMobil Development Company Ltd., a division of ExxonMobil.

Included in that arctic portfolio is the Sakhalin project, which uses a gravity base structure and consists of three offshore fields off Russia's eastern coast.

"We're particularly pleased to add Hebron to this portfolio because this is really a world-class opportunity," said Flood. "I'll use my one hockey analogy. This is really the hat-trick of all projects. Very seldom do you go in the world where you get to go work in a place where the community wants you, industry wants you and government wants you."

Based in Houston these days, Flood spent three years in Russia as the local project manager of the Sakhalin offshore development.

"We'll have the same model for the Hebron project."

Hareesh Pillai, recently named senior project manager of Hebron, is scheduled to be move to St. John's in the first three months of 2009.

Organizations: ExxonMobil, Hibernia, Newfoundland and Labrador Oil and Gas Industries Association

Geographic location: Hebron, ST. JOHN'S, Alberta Sakhalin Russia Terra Nova White Rose Houston

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