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Premier Says He Will Fight Big Oil's Lawsuit Over Newfoundland Resources

Posted on: Thursday, 27 September 2007, 15:00 CDT

By THE CANADIAN PRESS

CORNER BROOK, N.L. - Newfoundland and Labrador Premier Danny Williams says he'll fight two U.S. oil giants over complaints they're being forced to spend millions of dollars on research in the province.

Williams says he is disappointed that ExxonMobil and Murphy Oil plan to sue the federal government, alleging it violated the North American Free Trade Agreement by allowing the province to adopt a new guideline on research investment.

"Research-and-development is really very important to our province, it's very important to the industry, and I would like to think that they'd want to be positively contributing to that," Williams said while campaigning for next month's provincial election.

"But if they don't, we'll certainly fight them all the way in court."

The two companies say the federal government breached a previous NAFTA agreement when a provincial-federal agency introduced a new guideline in November 2004 requiring an increase in R&D funding.

In notices of intent filed last month, ExxonMobil and Murphy Oil say the new regulation would cost them $40 million and $10 million, respectively, regardless of the commercial need for such investment or of the resources in place to sustain it.

The companies call the guideline "restrictive" as it specifies a fixed amount of money to be invested, and cite the Newfoundland and Labrador government's push for more revenues from the offshore oil industry.

"The government of the province has increasingly encouraged the (Canada-Newfoundland and Labrador Offshore Petroleum Board) to put into place more robust local-content requirements," the documents allege.

The complaints stem from the Terra Nova and Hibernia offshore oil projects, in which both companies own stakes.

Source: Canadian Press

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