The Premier of Newfoundland and Labrador, Andrew Furey, has announced financial support for the Hibernia Project.
Under the support package, Hibernia Management and Development Company Ltd. (HMDC) will receive up to $38 million to restart well work, perform drill rig upgrades and invest in new digital technology. The investment, which is said to be around 40 percent of the total project cost, will result in 77 additional, full time equivalent (FTE) positions in 2021 and will maintain employment for 44 FTE positions next year and 27 FTE positions in 2022, according to a government statement.
HMDC has submitted a proposal for an additional scope of work which is currently being evaluated. If approved, it would bring the total funding commitment for the Hibernia Project to $66 million. Back in September, the federal government announced that $320 million would be administered by the province to support direct and indirect employment in the Newfoundland and Labrador oil and gas sector and activities that generate environmental and co-benefits.
The Oil and Gas Industry Recovery Task Force, established by Furey, was asked to develop recommendations on eligibility parameters and priority criteria for the fund, which includes three target areas; maintenance of existing installations, increasing productivity in the basin, and accelerating investment. A total of $288 million has been allocated for operators of existing offshore installations and $32 million has been allocated for projects to support the local oil and gas service and supply community.
“As we continue to work towards providing support that will benefit the oil and gas industry of our province … [this] announcement is another step in the right direction,” Andrew Parsons, the minister of industry, energy and technology, said in a government statement.
“The work proposed by HMDC will create employment for our oil and gas industry workers and create new cutting-edge technology in our offshore, allowing us to remain globally competitive,” he added.
Stephen Edwards, the president of HMDC, said, “Hibernia isn’t immune to the global challenges and market conditions caused by the Covid-19 pandemic”.
“We reduced spending in 2020 and this has impacted our contractor complement and drilling activities. We have an opportunity to change direction with this funding,” he added.
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