16 February 2010

Hibernia South: the buried news

So the final legal agreements are signed.  Nothing has changed since the announcement of almost exactly the same details in June 2009.

So why the second announcement?

Poll-goosing, of course.

The only twist is that the provincial government is claiming they’ll make more money  - $3.0 billion - now than before.  There’s more money, though, simply because they changed the assumed price of a barrel of oil. 

Now anyone with a brain could tell you that isn’t news, nor is it any more reliable and factual than claiming the amount of money would be double the projection from last year.

CBC is reporting the $3.0 billion as if it was true/real.  VOCM attributed the cash – making their statement doubly false - to the equity stake.

As noted here last year, the bulk of the revenue – no matter what assumed price of oil you use – comes from one place and one place alone:  the 1990 Hibernia deal. You can see that pretty clearly when you look at the supporting documents.

Meanwhile, the two bits of real news in this have been lost.  Settling the transportation dispute will bring the provincial treasury about $120 million in one-time oil cash this year.  That will help with revenues that are still running below forecast.  Oil production in December was 2.0 billion barrels below production in the same time last year.

And in the other bit of real news: no oil from the extension until the third or fourth quarter of 2012.  The offshore board got the development application on 01 February.

Now if that wasn’t enough poll goosing, there’s also the announcement from the provincial government’s oil and gas company that drilling is starting on yet another parcel NALCOR bought on the Great Northern Peninsula.  Real oil companies tend not to make such a huge deal out of every exploration hole they spud.  Political ones do, though, especially when they have to help goose a poll for The Boss.

And on a related bit of poll goosing, former Peckford-era policy advisor Cabot Martin is all smiles as his company continues exploring for oil, too.