An agreement to develop the Hibernia South offshore oilfield should be complete this year, Premier Danny Williams said.
More than a year ago, the Newfoundland and Labrador government rejected a proposal to develop the project, triggering fears that Williams was alienating the oil industry and scaring away investment.
Williams, said he intends to turn his attention to the Hibernia South project once a deal to develop the Hebron oilfield is finalized, which is expected soon.
The application was submitted in 2006 by the Hibernia Management and Development Corporation, which includes ExxonMobil, Chevron, Petro-Canada Norsk Hydro, Murphy Oil and Canada Hibernia Holding. ExxonMobil Canada president Glenn Scott said he was optimistic the Hibernia South negotiations would progress swiftly.
In August, Williams agreed to spend $110 million to secure a 4.9 per cent equity stake in Hebron - a first for the province.
That project is estimated to contain up to 700 million barrels of crude.
Newfoundland's three offshore oil projects are expected to surpass one billion barrels of oil in production this year.
Hibernia, Newfoundland's first offshore development on the Grand Banks, began producing oil in November 1997.
Source: Canadian Press