Danny Williams, you're the man!

Attaboy, Danny. You sure showed them, all those big oil companies and their white-shoe lawyers, those homegrown naysayers and the pundits in the national media. Good for you, I say -- at last, here's a premier with the guts to stand up to those cardsharps from the mainland trying to pull a fast one on the province, as they did so often in the past. No more bad deals. No, sir. ...

But don't take my word for it. Here's one observer who says this Hebron oil deal you've negotiated is a "tremendous agreement" offering "unprecedented benefits" to Newfoundland and Labrador, that the province is taking "real and meaningful ownership" in the project and that it's all thanks to your "determination and strength of conviction." Oh wait, that was you, at your press conference -- but still, you've got a right to crow, haven't you?

Haven't you forced the oil companies to give you a 4.9% ownership stake, when they swore up and down they never would -- to the point of walking away from the whole deal 16 months ago? True, you've agreed to pay them $110-million for it, which is $10-million more than you were offering before. And true, as you've admitted, you've lowered your demand for a new "super-royalty" on revenues from 7% to 6.5%. And true, you've lost 16 months to the dispute, meaning the revenues from the project start flowing that much later. But still, what a triumph!

Mind you, you might have mentioned another, rather important concession: namely, that the basic royalty the province charges in the early years of an offshore oil project, instead of rising from 1% of gross revenues to 7.5% at the point where all costs are paid out, as had been standard until now, has been frozen at just 1%. The province only gets the extra 6.5% if oil prices stay above US$50 a barrel.

What is the cost of this last concession? Your Natural Resources Minister won't tell us: "We're staying away at this point in time from going to assign value to it," she told the Canadian Press. But hey, if it's good enough for you, it's good enough for me. In the same way, I can see why there's no need to make public the text of the deal (actually, it's just a

memorandum of understanding -- the precise terms are still to be negotiated), or to bring it before the provincial legislature for ratification. After all, as you so well put it, if you did "[the opposition] would probably carry the government in on their shoulders and pass it with a blink." Why subject them to that degree of humiliation?

But here's another thing that bothers me, Danny. Leave aside how much you've given up in royalties to get that ownership stake. Why make such a trade at all? After all, the royalties in question are paid on gross revenues -- whereas ownership in the project entitles you, not just to a share of revenues, but a share of the costs. These have already climbed, from an estimated $6-billion to … well, no one seems to have a very clear idea what it will cost at this point.

But let's say it's closer to $10-billion, all told. That 4.9% equity stake lets you -- or rather the taxpayers -- in for another $500-million in costs, against about $2.5-billion in revenues, if oil stays at US$70 a barrel, or $1.5-billion at $50. So your share of the profits, over the life of the project, are between $1-billion and $2-billion. If the same money could be collected, at considerably less risk, in the form of royalties, why the fixation on public ownership?

I know: it's to give the province "a window" on the industry. But at 4.9%, the province would have precious little say in the operation. And it's hard to see what sort of leverage it would have, as a shareholder, that it would not have as a regulator, or what information it would not be able to obtain from regulatory filings, legislative hearings and private talks. Indeed, there's something bizarre about the government paying for the right to participate in the extraction of a resource it already owns.

And as for those "unprecedented benefits," presumably you mean the companies' assent to use a gravity-based structure as the project's platform, at much greater expense in time and manpower than the vessels used in other offshore projects. But the extra costs associated with building a GBS have to come from somewhere, and since the government of Newfoundland is now a part owner of the project, in part they will come from the government.

Overpaying your suppliers is not usually thought of as the road to riches, but what do I know? You're the one with the business experience. You're the one with the negotiating skills, the moxie, the backbone -- the one man on whom the whole future of Newfoundland depends. You've told us so many times.