Notes for an Address
by the Honourable Brian Tobin,
Premier of Newfoundland and Labrador
- I am very pleased to be here to speak about the emerging
oil and gas industry in Newfoundland and Labrador. Make
no mistake about it, this province is rapidly taking its
place within Canada, and globally, as a significant
player in the petroleum sector.
- I am very encouraged by our magnificent accomplishments
at Hibernia and by recent statements from Petro-Canada,
Norsk Hydro, Husky and others which reflect the growing
scale of offshore oil and gas operations in this
- The quality of work undertaken by the Newfoundland and
Labrador labor force on the Hibernia project has been at
a very high standard. Consultations with labor and
management to develop a safe, stable and productive
workplace for offshore production platforms are ongoing.
Labor relations are a critical component in ensuring the
viability of our new oil and gas industry and I am
confident that the efforts of labour, management and
government will result, at the end of the day, in a
framework that will meet the needs of labour and
management and enhance the province's position in the
international petroleum industry. We must have this
result in order to compete effectively on a global basis.
- Petro-Canada has announced an organizational change which
will result in a higher level decision-making presence in
the Province. They have established a new Offshore
Development and Operation Strategic Business Unit wherein
the responsibility for Petro-Canada's east coast
development, operations and joint venture production
activities will be managed. This new unit, to be headed
by Vice President, Gary Bruce, will be located in St.
John's. Relocation of Petro-Canada's personnel to St.
John's is linked to Terra Nova development plan approval.
I am pleased that the company intends to dramatically
increase its presence in Newfoundland and Labrador.
- Similarly, Norsk Hydro, which has entered into a transfer
of interests agreement with Petro-Canada, has stated its
intention to assign key project management and technical
personnel to the Terra Nova Project and that these
individuals will also reside in St. John's. Norsk Hydro
currently does not have an oil and gas presence in
Canada. Its recent decision to choose Newfoundland and
Labrador as its entry point into the North American oil
and gas industry is indeed good news for us. The transfer
of its management and technical expertise to this
Province is welcomed. As you know, Norsk Hydro's
experience and very considerable expertise in
international oil and gas operations will facilitate not
only Terra Nova development but will assist in optimizing
production from Hibernia, Whiterose and other significant
discoveries offshore Newfoundland and Labrador. The
Government of Newfoundland and Labrador is delighted to
participate today in the closing of the agreements
respecting the transfer of interests between Norsk Hydro
- More good news. Petro-Canada's announcement today that
they have chosen the Grand Banks Alliance as the prime
contractor for the Terra Nova development means that the
front end engineering can commence immediately on the
preferred mode of development - the steel monohull - and
subject to regulatory approvals, the project is now fast
tracked for first oil production in late 1999. We look to
Petro-Canada, as operator of the Terra Nova project, to
use its very best efforts to maximize engineering in the
Province; place significant topsides fabrication work in
the Province; maximize Newfoundland content in the Terra
Nova drilling program and work closely with the Province
to enhance the Provincežs expertise in subsea
technology. I am pleased that there are at least 500-800
short term construction jobs which Petro Canada has
identified, as well as some 400-500 jobs during the
- On another front, ladies and gentlemen, I have to say
that I was quite pleased with the front page article in
the Globe and Mail yesterday, respecting discussions we
have had about Husky's plans for the new Whiterose
megaproject. All of these positive developments coming
together at this time of the year - [yes, Virginia there
is a Santa] - is certainly a great Christmas present. By
Christmas 1999, we could see up to 150,000 barrels a day
from Hibernia, up to 150,000 barrels a day from Terra
Nova and several thousand barrels a day on extended
production test from Whiterose! Ladies and gentlemen
there is no doubt that we have an oil and gas industry in
this Province and we have it now.
- J.P. Bryan, Gulf's chief executive is quoted in the same
Globe and Mail article as saying he's "excited by
the East Coast. It's got enormous potential." My
good friend, Jamie Blair, with Husky stated that "In
terms of world-class oil field development, (Whiterose)
will be a very significant program."
- All of this positive news reflects the global scope of
operations carried on by the oil and gas industry. The
fiscal terms and conditions that government has put in
place offshore, through the generic royalty regime and in
other ways, are being viewed positively. These are the
types of steps that we must take in order to compete on a
global basis. This is what it's all about - effectively
competing - and there's absolutely no doubt in my mind
that Newfoundlanders and Labradorians involved in this
industry realize the importance of being competitive.
Benefits will flow to this Province if we continue to
hone our skills, be aggressive in our pursuit of
business, and do what it takes to win. The old adage
lives today: "as ye sow, so shall ye reap."
Consistent with this approach, early in the New Year I
will accompany the Prime Minister and Team Canada on an
international trade mission to Asia. Hopefully, the news
emanating from that trip will be positive like the news
we've announced today.
- Ladies and gentlemen - welcome to the Newfoundland and
Labrador oil and gas industry.
- It's here, and it's here to stay.