John Crosbie and the quest to save Hibernia

John Crosbie and the quest to save Hibernia

The colourful former federal cabinet minister remembers his role in saving Newfoundland’s first offshore oil mega-project

There was no doubt in the late 1980s and early 1990s that Hibernia was very close to not being developed. It had gone through a number of trials and tribulations. The final crisis broke out in February of 1992 when Gulf Canada said it was abandoning its commitment to participate with the three other partners in Hibernia. There was an agreement with the partners that if any of them left, the consortium had a year to find a replacement for that investment in order for Hibernia to survive. We needed someone to take over Gulf’s 25 per cent.

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I had to see if I could find someone to replace Gulf. I spent a lot of the next year operating from Newfoundland and Florida making frantic phone calls and talking to investors who might agree to replace Gulf’s investment. I was unable to find anybody interested until somebody suggested this little company in Arkansas named Murphy Oil. I had heard of Arkansas but not Murphy Oil. But I contacted the owner, Charles Murphy Jr., and went to see him. I somehow found a miracle. He agreed to take a small 6.5 per cent investment in the project.

Having succeeded in finding one other private concern that would make a small investment in the project, I was emboldened to go back to the prime minister at the time, Brian Mulroney. He had been a firm supporter of the project. He had set up a cabinet committee in connection to the Hibernia investment proposal to look into whether the Canadian government should invest more money in it in the event we couldn’t find the money anywhere else in the private sector.

One of the difficulties in getting Mulroney’s government to approve any additional investment and risk-taking in Hibernia was it appeared inconsistent with all kinds of cost-cutting actions we had taken. There was tremendous opposition to this. The Globe and Mail led a campaign in Toronto against the suggestion that any other monies should be invested in Hibernia by the government. But Mulroney had the special cabinet committee re-consider it. It decided to take an 8.5 per cent stake in the project.

Developing Hibernia was essential if Newfoundland and Labrador was going to continue as a viable province. It was a very important issue for the people of Newfoundland and it was very important we overcame this issue. Saving Hibernia was a long and torturous process. But it’s done pretty well and is still increasing in value, and other companies are still exploring our offshore.

The federal government’s investment in Hibernia has turned out to be a very wise move. Brian Mulroney’s undying support of the project is why I think it survived. As far as my career is concerned I would have to place helping get Hibernia developed at the top of anything I was ever able to achieve for the province. I had a long career, but it was one of my top achievements.

1 Comment to “John Crosbie and the quest to save Hibernia”

  1. Brian O'Neill // January 18, 2017 at 4:28 am // Reply

    Thank you Mr. Crosbie for your very wise decision to convince the Prime Minister to invest in this project.

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