Chevron group signs $4.7B oilfield deal

ST. JOHN'S, Newfoundland, Aug. 22 (UPI) -- Four oil companies have reached a $4.7 billion oil field deal with Canada's easternmost province, a government official said Wednesday.

The deal between the province of Newfoundland and Labrador and a consortium of Chevron Corp., ExxonMobil Corp., Petro-Canada and Norsk Hydro Canada Oil and Gas Inc. to build an oil field off the Newfoundland coast near Hebron, 220 miles southeast of St. John's, is expected to generate $15 billion for the province over the project's 25-year life, Premier Danny Williams said.

Canada's federal government will receive $7 billion, he said.

The oil companies were not immediately available to comment on their expected revenues.

Newfoundland and Labrador will invest $104 million to secure a 4.9 percent equity stake in the project, a first for the province, said Williams, a Conservative who is up for re-election in October.

Engineering work is scheduled to begin in 18 months and construction is slated to begin by 2010, he said.

It is too early to say how many jobs will be created, Williams said.

Under the deal, the province will also receive "super-royalties" that go up as the price of oil rises, the Canadian Broadcasting Corp. reported.

Some industry experts have cautioned the oilfield's high sulfur content will make it costly to develop.