22 August 2007

Hebron go ahead

From the National Post:
However, the gambit appears to have paid off. According speculation in Newfoundland Tuesday, he will announce a memorandum of understanding in which he won a 4.9% equity stake in Hebron for the province as well as a super royalty that would increase with oil prices -- demands that the oil companies would not agree to a year ago.

But Ed Hollett, a public policy commentator in St. John's, said it's possible the oil companies won concessions of their own, including tax breaks and an agreement to be able to do a lot of the work outside of Newfoundland. Mr. Williams had insisted that Hebron be built in the province.

"If by some miracle he got everything that he wanted, and the companies got nothing that they wanted, then he is the most brilliant negotiator in the universe," Mr. Hollett said. "But I have never known a negotiation that looked like that. Until we know the specifics, we don't know what this is all about, whether we have been diddling around for 18 months for nothing."

And from the Globe:
The deal will allow the province to earn a 4.9-per-cent equity stake in the project, and has a royalty regime that will ensure the province earns a greater share of the proceeds from oil production than it has from existing offshore projects, sources said last night.

Mr. Williams has been widely criticized for his insistence that the province gain an ownership stake in the project, with some critics dubbing him "Danny Chavez" after the socialist president of Venezuela, Hugo Chavez.

But the Premier — who faces an election on Oct. 9 — is wildly popular in his home province partly as a result of his battle with the international oil companies, as well as his heated disagreement with Prime Minister Stephen Harper over equalization.