25 April 2007

Terra Nova back in the cash

High oil prices mean that the Terra Nova oilfield has recovered recent refurbishment costs on the production platform and is now pumping higher royalties into provincial coffers, six weeks ahead of schedule.

The provincial government now receives 30% of the price of each barrel of oil produced under the royalty regime established with the provincial government.

Under the Atlantic Accord (1985), the Government of Newfoundland and Labrador sets royalty and other revenue rate for the offshore. It receives and retains 100% of the amount it sets. in addition, the provincial government continues to receive federal transfers for a fixed period under terms set out in the 1985 Accord and in a 2005 add-on deal between the Government of Newfoundland and Labrador and the Government of Canada.

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