Exxon Mobil proceeds with $14 billion Canada oil field

Fri Jan 4, 2013 4:04pm EST
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By Jeffrey Jones

CALGARY, Alberta (Reuters) - Exxon Mobil Corp (XOM.N: Quote) said on Friday it is moving ahead with the next major oil project in the North Atlantic, the $14 billion Hebron development off the Newfoundland coast, boosting its already-large investments in Canada's most oil-rich regions.

Exxon Mobil, the biggest U.S. oil major, said it will produce 150,000 barrels of oil a day at Hebron using a massive concrete gravity-base structure like the one employed at the nearby Hibernia project, which has been operating in the iceberg-prone region since the late 1990s.

First production of the project's heavy crude is scheduled for 2017.

The green light for Hebron, the fourth major offshore Newfoundland oil project, encouraged owners of energy operations in harsh areas in a week during which critics pilloried the industry for an accident in the Far North.

In the United States, opponents of Royal Dutch Shell's (RDSa.L: Quote) Arctic oil program called on the Obama administration to put offshore drilling plans in the region on hold after its oil rig broke away from tow boats in high seas and ran aground off Alaska.

In a statement, Exxon Mobil said its own experience in Arctic development would serve it well as it and its partners develop Hebron in the tough Atlantic operating conditions.

The 700 million barrel project, in the Jeanne d'Arc Basin, 350 km (200 miles) southeast of St John's, Newfoundland, is well below the Arctic Circle. Discovered in 1980, the development follows others - Hibernia, Terra Nova and White Rose - in the region. It won regulatory approval last year.

For Exxon Mobil, Hebron is moving forward just as it is set to start production from the C$10.9 billion Kearl oil sands project in Northern Alberta, operated by its Canadian affiliate Imperial Oil Ltd. (IMO.TO: Quote). The first phase will pump 110,000 barrels a day of bitumen.   Continued...

The Exxon corporate logo is pictured at a gas station in Arlington, Virginia January 31, 2012. REUTERS/Jason Reed