Oil giant Exxon Mobil Corp. (XOM) said Friday that a consortium led by it will spend $14 billion to pump oil from the massive Hebron offshore oil field off Canada's East Coast. The company expects the project to recover more than 700 million barrels of oil from a field in water of about 300 feet deep off the coast of Newfoundland and Labrador.
The Hebron field is located about 200 miles southeast of the capital of St. John's, and is the province's second-largest oil discovery after ExxonMobil's Hibernia project.
The production at the Hebron field is set to start in early 2017 and will be capable of churning out 150,000 barrels of oil per day from the gravity-based platform.
"Hebron is one of several large-scale oil developments that ExxonMobil will bring on stream in the next five years. ExxonMobil will employ its expertise in Arctic development and project execution to develop this world-class resource in challenging operating conditions," said Neil Duffin, president of ExxonMobil Development Co.
The deal is part of ExxonMobil plans announced last year to spend $185 billion over five years to develop new supplies of energy. The project received regulatory approval from the governments of Canada and Newfoundland and Labrador in May.
The Hebron project will be led by ExxonMobil, which will own a 36 percent stake through its Canadian subsidiary. Others in the consortium include Chevron Corp. (CVX) with a 26.7 percent stake, Suncor Energy, Inc. (SU, SU.TO) with 22.7 percent, Norway's Statoil ASA (STO) with 9.7 percent, and Nalcor Energy Oil and Gas with 4.9 percent.
Meanwhile, the project will provide employment for up to 3,500 people during construction in the province, and royalties and taxes to fund provincial infrastructure, social programs and services.
XOM closed Friday's regular trading session at $88.96, up $0.41 or 0.46% on a volume of 11.43 million shares.
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