The emergence of the Grand Banks as an oil producing region has provided many benefits to the Province. New infrastructure, technical knowledge and expertise, and an experienced labour force are direct results of the development of Hibernia. In addition, the production of oil is providing the direct benefits of employment and income as well as creating indirect benefits through the purchase of a wide array of goods and services.
HIBERNIA
Hibernia began pumping oil on November 17, 1997, signalling the beginning of a new era for the oil industry in this Province. Production for the year was approximately 1.3 million barrelsone shipment of oil took place before year-end. Employment for the year averaged about 1,500 persons, down substantially from the 4,400 recorded in 1996 when the project was still in the more labour intensive construction phase.
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Targetted production for 1998 is about 25 million barrels. About 700 persons are expected to be employed year-round in "steady-state" operations.
TRANSSHIPMENT FACILITY
Part of the infrastructure created to service the oil industry is the oil transshipment facility at Whiffen Head. The terminal will be used for the transshipment of Hibernia oil with the capability for expansion to accommodate oil from Terra Nova and possibly other projects as well. The facility is scheduled to be completed by the fall of 1998.
EXPLORATION ACTIVITY
Indicative of the industry's confidence, both the Grand Banks and the West Coast experienced exploration activity last year with expenditures more than double those recorded in 1996. Delpet Resources drilled the Big Spring #1 well in the Hare Bay area of the West Coast. On the Grand Banks, Amoco Canada drilled a well on its West Bonne Bay holding. Also, considerable seismic work was carried out in both areas.
Interest in the exploration potential of the Province was further validated by industry's response to the 1997 Call for Bids for exploration rights in the Newfoundland offshore. The Call for Bids received responses on all seven parcels offered. Four of the parcels are located in the Jeanne d'Arc Basin on the Grand Banks and three are located off the West Coast of Newfoundland. Bids representing a total work expenditure commitment of $98 million were selected for the seven parcels.
OUTLOOK
The outlook for the oil industry is very bright. This year will see a full year of oil
production from Hibernia, investment and employment related to the Terra Nova project, and
an increasing level of exploration activity. A delineation well will be drilled at both
the Hebron field and the White Rose field on the Grand Banks this year and up to four
wells could be drilled on the West Coast. The development of Terra Nova will add to oil
production in the future and the continued development of infrastructure should provide an
incentive for further exploration.
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