Chevron Canada Resources - Evaluation of Hebron Project Discontinued

February 13, 2002, 00:00 CET

CALGARY - Chevron Canada Resources - along with joint venture partners ExxonMobil Canada, Norsk Hydro Canada Oil & Gas, and Petro-Canada - have decided to discontinue the joint evaluation of the Hebron project, according to a press release from Chevron Canada.

"This decision was reached after two years of comprehensive evaluation of a variety of development options," said Jim Simpson, President, Chevron Canada Resources. "Hebron is an extremely complex project which poses significant technical challenges."

The field has demanding reservoir characteristics that have not been experienced with Hibernia and Terra Nova developments. Up to 75 per cent of the recoverable reserves are heavier oil making offshore production slower and more costly. "Current technology would require a greater number of wells to be drilled which would add significantly to the capital investment," explained Simpson.

"Given the high-cost environment in Eastern Canada, we determined the economics cannot support moving forward at this time."
The partners evaluated three production system options including a gravity-based structure, a floating production, storage and off-loading system, and a hybrid system. None of these options suitably met the project requirements.

All agree that Hebron Ben Nevis is a significant resource that is valued as a potentially important asset for the future. "While we cannot find a way to economically develop it now, the resource base is a good one that may have longer range development potential," said Simpson.