Premier Kathy Dunderdale addressed the Newfoundland and Labrador Oil and Gas Industries Association conference this morning.
She told the gathering that the province has become absolutely dependent on offshore revenue which provides one third of the province’s revenue, provides direct employment for more than 3,000 people and indirectly employs thousands more.
The province pegged Brent Crude at an average of $124 per barrel as the annual average price for the year. The problem is, Brent is trading at below $96 per barrel, which is bad news for the government's estimated income from oil. This, I fear is the danger of being dependent on a staple resource that's value is decided by the violent swings and vagaries of a volatile world economy.
Interesting how government takes the credit for windfall royalties as examples of good fiscal management.
She used the opportunity to bang-off a shot at the consortium developing the Hebron Project. She says her government will be ensuring that ExxonMobil, the project lead, builds the Hebron oilfield structures in this province.
The company has been musing about building the Hebron
drilling equipment module outside the province, and paying penalties. The company claims the province’s building capacity is too small.
For those of you that are interested in the history, current state and future opportunities in the Newfoundland and Labrador Offshore Oil and Gas Industry, I would like to direct you to a fantastic government publication issued a few months ago.
The Department of Natural Resources publishes an Annual Petroleum Development Annual Activity Report which is an excellent source of information on all petroleum exploration and development in the province.