Update: Hebron partners say complying with agreements

Ashley Fitzpatrick
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Responding to concerns around benefits agreement being violated

The companies partnered on construction of the Hebron offshore oil platform have responded to concerns being expressed this week around compliance with a benefits agreement signed with the province.

Hebron project lead Geoff Parker gestures towards the Bull Arm construction site in June 2013.

According to a spokeswoman for the Hebron project partnership — including ExxonMobil Canada Properties (36 per cent interest), Chevron Canada Limited (26.7 per cent), Suncor Energy Inc. (22.7 per cent), Statoil Canada (9.7 per cent) and Nalcor Energy (4.9 per cent) — there is no issue.

“The Hebron co-venturers are complying with the project Benefits Agreement. There is a substantial amount of work being done in the province by Newfoundland and Labrador residents. In fact, as of the end of 2013, almost 4,000 Newfoundland and Labrador residents were working on the Hebron project in the province,” stated project rep Lynn Evans, in response to questions today.

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Earlier story:

Province looking into Hebron complaints

Association hints that benefits agreement has been violated

The provincial government is taking a hard look at recent rumblings the $14-billion Hebron project is running afoul of an agreed provincial benefits plan.

“Our intent is to ensure that commitments in the benefits agreement are honoured and we expect the operator to adhere to its contractual commitments it has made with the province,” said Natural Resources Minister Derrick Dalley, in a response to questions early Tuesday evening.

“We take all these matters seriously and we are investigating.”

The Telegram contacted the department after seeing a statement being circulated by Noia, the province’s oil industry association, to its members, assuring them the association was aware of some recent discontent with the Hebron project regarding compliance with the benefits agreement.

“Noia members have expressed concerns about contract packages for the Hebron project,” it reads.

“Noia has been working on this important industrial benefit issue on behalf of membership and it is our expectation that both the government of Newfoundland and Labrador and the Hebron project proponent, ExxonMobil, adhere and comply with the commitments as outlined in the Hebron benefits agreement.”

A Noia spokeswoman told The Telegram the statement was, in part, in reaction to recent news reports about skilled trades workers’ concerns about fabrication work going outside the province.

As of deadline, The Telegram had yet to identify any specific complaints or complainants.

Work for Hebron being sent outside the province is a serious matter. For example, when the provincial government announced it would allow a large piece of the overall platform build — the derrick equipment set (DES) — to be built outside the province, it stipulated the companies partnered on the project would pay $150 million in compensation for the work lost here.

The DES and the utilities process module, both being parts of the top side of the Hebron offshore oil platform, are being built by Hyundai Heavy Industries in South Korea. In this province, the immense concrete base of the platform is being built at Bull Arm, as is the living quarters module for the topsides.

The living quarters is being built by NEAL — a partnership of North Eastern Constructors Limited, a division of G.J. Cahill, and Norwegian contractor Apply Leirvik.

The topsides will also need a flare boom, lifeboat stations and helideck supplied.

Recent complaints are apparently focused on subcontract work on the project though, again, it remains unclear where the Hebron partners are alleged to have violated the benefits agreement.

 

afitzpatrick@thetelegram.com

Organizations: The Telegram, Hyundai Heavy Industries, Division of G.J. Cahill

Geographic location: Hebron, Newfoundland and Labrador, South Korea

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  • Corporate Psycho
    April 16, 2014 - 19:26

    I guess you can drive a Mac truck through Danny's deal.