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Gold/Mining/Energy : KERM'S KORNER

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To: Kerm Yerman who wrote (13993)	12/4/1998 9:47:00 AM
From: Kerm Yerman	Read Replies (2) of 15196

IN THE NEWS / Another Step For Terra Nova Project 12/4/98 By PAT DOYLE The Telegram The way has been cleared for the Terra Nova project to apply for a production licence. The Canada-Newfoundland Offshore Petroleum Board (CNOPB) has announced the declaration of the configuration of the project's commercial discovery area. “This declaration follows an application process which began in June 1998 and enables the Terra Nova group to apply for a production licence,” the board said Thursday. A spokesman for Petro-Canada, the operating partner of the project, said the application for a production licence would normally be made when the production start date is approaching. First oil is currently expected by year end 2000, at a cost of $2 billion. Post first oil capital costs are estimated to be $600 million for a total capital cost of $2.6 billion. Operating v costs of $1.9 billion over the 15-year life of the field will bring the total project cost to $4.5 billion. The CNOPB explained that although it has been recognized for some time that the Terra Nova field is commercially producible, the precise configuration of the commercial discovery area needed to be ascertained before a production licence could be issued for the particular lands. “A commercial discovery of petroleum is one which has been demonstrated to contain petroleum reserves that justify the investment of capital and effort to bring the discovery to production and the commercial discovery area is the area to which the discovery extends,” the board said. The Terra Nova group consists of Petro-Canada (29 per cent) which is the operator; Mobil Oil Canada Properties (22 per cent), Chevron Canada Resources (one per cent), Murphy Oil Co (12 per cent)., Norsk Hydro Canada Oil & Gas Inc. (15 per cent) Husky Oil Operations Ltd. (17.5 per cent) and Mosbacher Operating Ltd. (3.5 per cent). The area of the Terra Nova field that has been delineated is estimated to have reserves of 370 million barrels while the area not yet delineated is estimated to contain another 100 million barrels.

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