CALGARY, Alberta (Reuters) - The Hebron oil field,
Newfoundland's fourth offshore project, will start producing in
the next eight to 10 years after the operator, Chevron Corp
Under the deal, the C$4 billion to C$6 billion ($3.8 billion to $5.7 billion) project will produce 150,000 barrels a day at its peak, the partners said on Wednesday at a signing ceremony in St. John's, Newfoundland.
The formal agreement comes a year after the province and oil companies agreed to a memorandum of understanding that ended years of on-again, off-again talks.
Newfoundland will own a 4.9 percent stake in the 400 million to 700 million barrel project as part of Premier Danny Williams' push to wrest more financial rewards from oil development for his province.
Hebron will also be subject to a 6.5 percent super-royalty on net revenue, which kicks in when oil prices exceed $50 a barrel, in addition to the standard royalty. U.S. oil was worth more than $115 a barrel on Wednesday.
The massive concrete platform for the project will be built at Newfoundland's Bull Arm construction yard.
Williams said the field, located about 350 km (220 miles) southeast of St. John's, is expected to generate C$20 billion for Newfoundland over its 20-25 year life.
Hebron's other partners are Petro-Canada
(Reporting by Jeffrey Jones; editing by Rob Wilson)
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