The province of Newfoundland and Labrador has signed a tentative agreement with members of the Hibernia Consortium that is expected to inject $10 billion into the growing piggy bank of the province. That's in addition to the $13 billion the province expects to receive from the main Hibernia project. Last year an MOU was signed on developing the Hebron oilfield - which will be worth up to $20 billion, give or take $5.
Well the future does look bright in the long run in many ways. Certainly there is no healthier industry here than the oily one. One would expect to see "Have" status next the Newfoundland and Labrador for many years to come. Now, like any past time is a good time to think of economic diversity. There will be an ever more booming St. John's. Today Randy Simms on his VOCM talk show made a point of mentioning how other industries like the fishery, the past mainstay of the economy, and major employer, may have possibly taken a back seat amidst the oil growth. From listening to a clip of the audio it seemed like a reasonable topic to throw out to listeners, and one which can be addressed at any time. It didn't detract from the good oil news. However, Premier Williams gave Randy an earful, and accused Simms of being pessimistic and a naysayer. Premier Williams' business skills, and personal success are certainly very handy in negotiating with oil godfathers, but boy does he have a temper. Have a listen.
Back to Newfoundland and Labrador's future, so much positive can come from this. On health we should focus on illness prevention. There are many health problems, from cancers, strokes, heart problems to obesity that stems from our choices of lifestyle and diet. Yesterday President Obama gave a comprehensive speech on health reform in the U.S. One of the ways to save costs and lives was to focus on preventing the illness in the first place by educating the public, encouraging companies to offer health premium payment reductions for healthier personnel. Fewer visits to the hospital will put less strain on already stressed doctors, and at the same time, allow nurses more breathing room at the workplace. Plus, we can have better quality lives.
The province really needs to accelerate recycling. There are a couple of facilities being constructed in St. John's, but this is another area that is beneficial on many levels. The environment does not get wasted quite so much, it is a money making industry, and there would be more individual involvement and responsibility for keeping the place clean, and also cutting down on the expense of collecting garbage and finding a place to throw it.
We still have a huge debt. What an opportunity to really pay that credit card off over the next 10-15 years.
People in the province have to look at the future as a stem cell, something that can be turned into whatever you can dream of, and be encouraged to excel at individual talents and trades. The oil industry in a huge sector of the economy, but not a remedy for everyone everywhere. Hebron and South Hibernia development are still years away from construction and development, and in the meantime, the best bet is to plan for your own personal development, growth and future.
Showing posts with label Hebron. Show all posts
Showing posts with label Hebron. Show all posts
Tuesday, June 16, 2009
Tuesday, August 19, 2008
Going with the flow of Hebron
Though the deal was done in July the official announcement comes tomorrow, and according to Williams critic Ed Hollett at Bond Papers, just in time to precede the Corporate Research Associate quarterly poll. It would probably not be the first time a government timed a big announcement to affect poll results, especially with by-elections coming up. However, evidence to suggest that government lacks openness and honesty are something the public should be aware of and concerned about, and some NL bloggers have really driven that thread.
Most people do not analyze the fine internal political machinations that take place, but rather may dismiss it. What matters to most people are the economic benefits the Hebron project possibly has for them individually in terms of jobs and income levels, and the social, health and economic well being of the province. The field will pump 200,000 barrels of oil for 25 years (there could be more oil in the field, yet unannounced). It will not be as big as Hibernia, but the $16 billion worth of benefits to Newfoundland and Labrador is not too bad at all, and it will create over 3000 jobs in the first few years of development. The federal government will get $7 billion from the project.
The $16 billion is based on oil prices of $70 per barrel. Right now the prices are from the governments' point of view, wonderfully high at $115 a barrel - down from $147 over a month ago. It could keep going down. In recent months there are reports that consumer demand has fallen considerably. Might this be a see-saw situation? Once the fuel prices goes down enough will people go back to consuming more, hence driving prices up once again?
If alternate forms of energy like wind power, and electric cars continue their slow development, it seems to this non-expert that there will be a big demand for fossil fuels for many years to come, thus keeping the price of oil high.
Electric cars are promising. The Zap is a low priced electric vehicle, at $11,000 for the three wheeled city vehicle. Unfortunately, for many users it is not practical - low mileage per charge, and a bit too slow for arterial roads. Other more powerful electric cars may have the power, but for many the price is too out of reach, and therefore, not replacing the gas fed cars to any significant degree.
For now, the oil money from current and future sources seems like a steady flow - how to use this new found wealth to get rid of the provincial debt, maintain and improve health care, and other important needs, is a bigger challenge. Perhaps more government openness could be attained if a goal-oriented, long-term debt reduction, and economic outlook plan was produced. One that showed how much the provincial debt will be reduced each year for the next year, by 5 years, 10 years - 20 years. One that showed how much of our "have" status revenue will be devoted to reducing the provincial debt over the long run.
Most people do not analyze the fine internal political machinations that take place, but rather may dismiss it. What matters to most people are the economic benefits the Hebron project possibly has for them individually in terms of jobs and income levels, and the social, health and economic well being of the province. The field will pump 200,000 barrels of oil for 25 years (there could be more oil in the field, yet unannounced). It will not be as big as Hibernia, but the $16 billion worth of benefits to Newfoundland and Labrador is not too bad at all, and it will create over 3000 jobs in the first few years of development. The federal government will get $7 billion from the project.
The $16 billion is based on oil prices of $70 per barrel. Right now the prices are from the governments' point of view, wonderfully high at $115 a barrel - down from $147 over a month ago. It could keep going down. In recent months there are reports that consumer demand has fallen considerably. Might this be a see-saw situation? Once the fuel prices goes down enough will people go back to consuming more, hence driving prices up once again?
If alternate forms of energy like wind power, and electric cars continue their slow development, it seems to this non-expert that there will be a big demand for fossil fuels for many years to come, thus keeping the price of oil high.
Electric cars are promising. The Zap is a low priced electric vehicle, at $11,000 for the three wheeled city vehicle. Unfortunately, for many users it is not practical - low mileage per charge, and a bit too slow for arterial roads. Other more powerful electric cars may have the power, but for many the price is too out of reach, and therefore, not replacing the gas fed cars to any significant degree.
For now, the oil money from current and future sources seems like a steady flow - how to use this new found wealth to get rid of the provincial debt, maintain and improve health care, and other important needs, is a bigger challenge. Perhaps more government openness could be attained if a goal-oriented, long-term debt reduction, and economic outlook plan was produced. One that showed how much the provincial debt will be reduced each year for the next year, by 5 years, 10 years - 20 years. One that showed how much of our "have" status revenue will be devoted to reducing the provincial debt over the long run.
Thursday, August 23, 2007
Oil Slick
Danny Williams was smooth and slick Wednesday as he announced the memorandum of understanding between NL and Hebron industry partners. At 70% in the polls he certainly don't really need a big announcement like this to put him over the top in the fall election, but some will say that he's also being slippery. So far the M.O.U. has been given very favorable assessments by some key analysts. Economist Wade Locke gave it a clear thumbs up on CBC TV earlier, mentioned short term benefits of job creation, oil industry momentum and spin-off industry development. He also said that the risk associated with the Hebron project is acceptable, and "it's hard to find something negative about this development." "It could add $8.1 billion to the province's coffers until 2035." MUN's Steve Tomblin expressed similar thoughts and had a positive tone about the M.O.U. in a CTV interview.
A gravity-based-structure (gbs) is to be constructed in Newfoundland, similar to the Hibernia platform, and again will need to employ 1000's of workers to construct the gbs. Everything sounds very much like this 1990 Hibernia news clip, including a less optimistic Wade Locke, who said that the Hibernia development would not improve the standard of living for the "average Newfoundlander".
Hebron could be the second largest oil field in the Jeanne d'Arc Basin, producing from 400 - 700 millions barrels of oil in its lifetime. Hibernia was estimated to have approximately 1 billion barrels of oil reserves. There is only the potential of the upper limit but because the oil is a heavier and lesser-quality crude than the other three oil fields - and thus, the price will be less than what Hibernia can get.
Chevron Canada's VP, James Bates was generally positive in his interview on Here & Now but careful not to divulge any details or show much exuberance about the M.O.U. One sensed that yes indeed plenty more detail had to be inked, and that the "deal" could change. How good the Hebron M.O.U. is may become more apparent in months from now. Give or take a couple of hundred $million, it's still a provincial opportunity to complete infrastructure projects, make a considerable payment on the debt, and maybe even allow the possibility of NL financing the development of Lower Churchill hydro besides developing hydro-carbons.
Hebron sounds great for the province in terms of jobs, the province's financial situation, and industry spin-off. Some ex-patriots will come back for employment, the outmigration trend will slow during the gbs construction phase. The level of celebrations will vary from person to person, group to group, region to region. A couple of weeks ago a local radio station ran an interview with some local (St. John's?) business person who referred to the current time of being without the Hebron deal as being the "party's over." For many average Newfoundlanders and Labradorians the question has been, what party was that? So it is best that people are realistic about this good development. There is such a wide variety of talents, strengths, and skill sets in our province, and many may not see immediate work opportunities, so a common sense piece of advice is to think ahead. What skills will be in demand? What services will people need? There will be an increase in oil related construction, so what products, services, activities will people want?
Newfoundland and Labrador won't be another Alberta anytime soon, but it's always good to see the potential and promise of a large economic development.
A gravity-based-structure (gbs) is to be constructed in Newfoundland, similar to the Hibernia platform, and again will need to employ 1000's of workers to construct the gbs. Everything sounds very much like this 1990 Hibernia news clip, including a less optimistic Wade Locke, who said that the Hibernia development would not improve the standard of living for the "average Newfoundlander".
Hebron could be the second largest oil field in the Jeanne d'Arc Basin, producing from 400 - 700 millions barrels of oil in its lifetime. Hibernia was estimated to have approximately 1 billion barrels of oil reserves. There is only the potential of the upper limit but because the oil is a heavier and lesser-quality crude than the other three oil fields - and thus, the price will be less than what Hibernia can get.
Chevron Canada's VP, James Bates was generally positive in his interview on Here & Now but careful not to divulge any details or show much exuberance about the M.O.U. One sensed that yes indeed plenty more detail had to be inked, and that the "deal" could change. How good the Hebron M.O.U. is may become more apparent in months from now. Give or take a couple of hundred $million, it's still a provincial opportunity to complete infrastructure projects, make a considerable payment on the debt, and maybe even allow the possibility of NL financing the development of Lower Churchill hydro besides developing hydro-carbons.
Hebron sounds great for the province in terms of jobs, the province's financial situation, and industry spin-off. Some ex-patriots will come back for employment, the outmigration trend will slow during the gbs construction phase. The level of celebrations will vary from person to person, group to group, region to region. A couple of weeks ago a local radio station ran an interview with some local (St. John's?) business person who referred to the current time of being without the Hebron deal as being the "party's over." For many average Newfoundlanders and Labradorians the question has been, what party was that? So it is best that people are realistic about this good development. There is such a wide variety of talents, strengths, and skill sets in our province, and many may not see immediate work opportunities, so a common sense piece of advice is to think ahead. What skills will be in demand? What services will people need? There will be an increase in oil related construction, so what products, services, activities will people want?
Newfoundland and Labrador won't be another Alberta anytime soon, but it's always good to see the potential and promise of a large economic development.
Wednesday, June 20, 2007
Would Industry Starve on NL's Hebron Terms?
At least talk of talking between Newfoundland and Labrador and the oil companies is better than complete silence. Danny Williams' speech to NOIA Tuesday appeared to be more open and inviting to resume talks with oil companies. I wonder would any premier of NL be called Premier Chávez if they were holding out for 4.9 per-cent stake in the project, and for a royalty rate that rises with global crude oil prices, and is this fair? Or is this just Danny Williams because of his personal style? I guess Danny Williams is being called "Chávez" because he has a tough stand, or because of his said confrontational style. If it were Clyde Wells, or Gerry Reid, or whoever as Premier, would the "hold-out" stance on the development of Hebron be seen as "Chávezesque" or confrontational? Is what Williams is looking for going to eat into the oil company profits too much? Or are they being too greedy? How many billions do industry have to make for Hebron development to be fair for them? Perhaps that is a taboo area to question.
Natural Resources Minister Gary Lunn slammed Premier Williams in a text that was supposed to be presented at the NOIA conference, but due to fog, he was unable to land. I also wonder is it politically incorrect these days to suggest that the sacred economic engines cut some profit slack to facilitate project developments? Or does big industry find it a bit embarrassing to only make "so many" billions, or not increase its profit by X % each year? Perhaps the people of Newfoundland and Labrador could help out in the Hebron negotiations by taking up a collection for oil companies who might make financial sacrifices in moving the project forward.
Natural Resources Minister Gary Lunn slammed Premier Williams in a text that was supposed to be presented at the NOIA conference, but due to fog, he was unable to land. I also wonder is it politically incorrect these days to suggest that the sacred economic engines cut some profit slack to facilitate project developments? Or does big industry find it a bit embarrassing to only make "so many" billions, or not increase its profit by X % each year? Perhaps the people of Newfoundland and Labrador could help out in the Hebron negotiations by taking up a collection for oil companies who might make financial sacrifices in moving the project forward.
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