Guest Article
By Jerry Byrne, President, D.F. Barnes Limited

Hebron: An opportunity that is second to none

It is time for businesses in Newfoundland and Labrador to take stock and prepare for Hebron, our next potential offshore oil and gas development.

Hebron is a field with considerable resources – approximately 600 million barrels of oil. In fact, it is the second largest field on the Grand Banks and the second largest offshore oil field in Canada. For Newfoundland and Labrador, Hebron is also an opportunity that is second to none, offering a whole new set of experiences and opportunities for our local business community.

Hebron is primarily a heavy oil field, which likely means new set of challenges and technologies. Although Hebron operator, Chevron, is currently assessing production system options – which will likely be confirmed by early 2006 – it has recently been talking about using a gravity-base structure, otherwise known as a GBS. This structure may be somewhat similar to the Hibernia GBS but will have different specifications. The company also estimates that the field’s development will cost somewhere between $3.5 billion and $5.2 billion.

It is important that we, as a business community, prepare for Hebron, because there will be significant opportunities for companies in Newfoundland and Labrador if the project moves ahead. In fact, I recently read that Chevron’s one-person office in St. John’s is slated to expand to 80 employees by early 2006.

Although Hebron offers great new possibilities, it is also important that we have perspective and manage our expectations. Keep in mind: Hebron is still not officially considered “a project”. And according to Chevron, IF the owners decide to proceed, project sanction will likely take place late 2007, and first oil will be somewhere between 2011-2012. Fortunately, the project partners recently signed a joint operating agreement, which many believe is a positive sign that we may soon see more progress.

So how do we get ready?

Here are some useful tips, based on my experience, which may help you prepare your company for Hebron:

• It is never too late. Many believed my company, D.F. Barnes Limited, entered the game late: two years ago. Now most of our work is driven by the province’s oil and gas industry. So go for it!
• Oil and gas companies and major contractors are always looking for new and improved contracting opportunities. They want world-class capabilities, great value, experience and a solid health and safety record.
• Oil companies have very high expectations, so remember this: if you want to work on an international project, you have to be able to deliver like an international company.
• The oil and gas industry is also an exacting client, requiring high levels of innovation, training and elevated safety standards.
• And finally, don’t get be swayed by negative cynics. I have found that the oil and gas industry generally wants to work with local companies – competitive, knowledgeable, capable, experienced companies with strong health and safety cultures.

Is Hebron second to none? I certainly think so. If it proceeds, the business opportunities will also be second to none. So, get to know Chevron’s procurement representatives when they are in place. Find out what they need. And get to know the industry’s major contractors because they will be assembling teams to win potential Hebron contracts.

We just have to be ready and able to meet the high demands of the petroleum industry – an industry that is driving much of the world’s economy today. We’ve done it before. I am sure we can do it again.