ExxonMobil To Operate $6B Hebron Oilfield, Replaces Chevron As Operator

Hebron, Newfoundland and Labrador (AHN) - Chevron, ExxonMobil and other partners involved in the Hebron offshore oilfield project signed an agreement Thursday that would further develop the $6 billion project.

The deal ended a two-year dispute on a demand by the Newfoundland provincial government that it owns a stake in the project.

The agreement allowed ExxonMobil to take over the operations of the Hebron oilfield from a Chevron Canada subsidiary, which, on the other hand, will now focus on offshore exploration.

The province agreed to pay $110 million of a 4.9 percent in Hebron. Meanwhile, the oil companies agreed to pay a 6.5 percent royalty to the province when oil sells for more than $50 a barrel.

ExxonMobil, which operates the Hibernia offshore oilfield, holds 37.9 percent stake in Hebron, while Chevron has 28 percent. Petro-Canada and Norsk Hydro also have interests.

Hebron is located 350 kilometers (217.5 miles) off the shore of Newfoundland and Labrador in the Jeanne d'Arc basin in the North Atlantic. It has reserves estimated at over 700 million barrels.