The Hebron Benefits Plan: Two Steps Forward… Mark Shrimpton April 6th, 2017
Agenda The Project Project Overview Project Location The Benefits Plan Scope Structure Principles Innovations Outcomes Conclusion
Hebron Project Overview Discovery Field discovered in 1981 Fourth major Grand Banks oilfield development project Operation c 1.0 billion barrels recoverable oil ExxonMobil-operated; Chevron, Suncor, Statoil & Nalcor co-venturers Constructed/assembled at Bull Arm, Eastern Newfoundland Other Information Harsh environment including icebergs Concrete gravity base structure (GBS), topsides, and shuttle tankers
Hebron Project Location
Hebron Benefits Plan Scope Context The Newfoundland Economy Atlantic Accord Acts, 1985, require project and program Newfoundland and Labrador (NL) benefits plans NL Benefits Plans ‘shall contain provisions intended to ensure that’: Office in Newfoundland and Labrador Full and fair opportunity and competitive basis First consideration re employment R&D and education and training First consideration re procurement Disadvantaged individuals and groups
Hebron Benefits Plan Scope Purpose Hebron Benefits Plan responds to regulatory requirements and guidance Separate ‘Socio-economic Impact Statement and Sustainable Development Report’ Timing Temporal scope: construction (2012 to 2017) operations (estimated 30 years) Benefits Plan submitted April 2011, approved May 2012
Hebron Benefits Plan Structure Introduction: Scope and drivers Project description Methodology Statutory and contractual requirements Approach and principles Policies and procedures: Project management Supplier development Procurement and contracting Employment and training R&D Diversity
Hebron Benefits Plan Structure Capacity assessment: Construction: Facilities Goods and services Labour Operations: Consultation, monitoring and reporting
Hebron Benefits Plan Principles ‘Meeting local benefits commitments while maintaining the highest levels of safety, environmental performance, efficiency and integrity of our operations’ ‘Selecting contractors and suppliers that will work diligently with us to deliver benefits to the people of the Province’ ‘Working collaboratively with industry, government, academic and training institutions, community and other stakeholder groups for the effective delivery of benefits’ ‘Delivering execution certainty so that the Project delivers best-in-class return on investment for stakeholders, including the Province’ ‘Promoting the development of local skills and industry capability that leaves a lasting legacy for the communities in which we operate and for the Province’
Hebron Benefits Plan Innovations Building a Benefits Culture ‘[The Hebron company] will draw on and further develop a benefits culture within its organization, and within all Hebron contracting companies’ ‘Driven by senior management… [the benefits culture] will see benefits considerations, including diversity considerations, being inherent to business processes and practices, rather than a separate consideration’
Hebron Benefits Plan Innovations Construction phase Benefits Sub-plans: GBS: Kiewit Kvaerner Contractors (KKC) Topsides: WorleyParsons Co-locating Procurement Co-locating Hebron and key contractor procurement personnel in St. John’s to facilitate opportunities for local companies Benefits Advisory Committee ‘a small number of local, national and international experts in economic development and benefits planning’ Benefits Community of Practice Initiative Bringing together Hebron and other NL practitioners to identify and promote good practice
Hebron Benefits Plan Innovations Industrial tourism ‘including the viability of extending industrial tourism opportunities beyond the end of the construction stage’ Province-wide procurement ‘Use distance technologies to facilitate access of rural businesses to the Project and industry procurement events in St. John’s’
Hebron Benefits Plan Outcomes Comparisons Cannot compare Hebron with previous projects because they delivered improved project-related: Infrastructure Labour force Business R&D Management expertise But ‘transformative change’ Benefits from Hebron: 57% of 2015/16 expenditures occurred in NL As of March 2016, 40% of total direct employment (8,662 person-years) went to NL residents
Hebron Benefits Plan Outcomes Benefits from Hebron: Major contributor to NL benefits from oil industry (e.g. 2014): C$4.6 billion of expenditures 10,173 person-years of employment 16.3% of labour income 15.9% of retail sales 36.1% of NL GDP Disappointments: Benefits Advisory Committee Benefits Community of Practice Initiative Industrial tourism Local community social and economic effects monitoring
Hebron Benefits Plan Conclusion Recent and often innovative example of a benefits plan Emphasis on: Role of contractors and suppliers (supply chain) Building a benefits culture Leaving a legacy for Newfoundland and Labrador Collaborating with industry, government, academic and training institutions, community and other stakeholder groups Some disappointments, but approach, principles and initiatives may have application on other projects Benefits planning now required for large onshore projects in Newfoundland and Labrador