1. The Hebron Benefits Plan:
Two Steps Forward…
Mark Shrimpton
April 6th, 2017

2. Agenda The Project Project Overview Project Location The Benefits Plan
Scope
Structure
Principles
Innovations
Outcomes
Conclusion

3. 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

4. Hebron Project Location

6. 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

7. 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

8. 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

9. Hebron Benefits Plan Structure
Capacity assessment:
Construction:
Facilities
Goods and services
Labour
Operations:
Consultation, monitoring and reporting

10. 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’

12. 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’

13. 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

14. 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’

16. 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

17. 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

18. 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