Canada's moment of truth in the long and frustrating push to develop its most promising new oil find, the 1.8-billion barrel Hibernia field beneath the Atlantic, has been pushed back once again.
Since the Hibernia field was discovered in 1979, bickering among different government levels has been a constant obstacle to development.
The administration of Prime Minister Pierre Trudeau and authorities in the East Coast province of Newfoundland both claim jurisdiction over Hibernia, which lies on the Grand Banks 200 miles off Newfoundland's coast.
After a flurry of optimistic reports, talks between the Canadian government and the leaders of Newfoundland were unexpectedly broken off late last month.
Resolution of the dispute must now await decisions by the Newfoundland Court of Appeals, expected this month, and by the Supreme Court of Canada, which is not expected to bring down a judgment until next summer or autumn. the
A resolution of the discussions over how the two governments should divide up tax revenues from Hibernia and jointly manage the development process would have greatly brightened the outlook of the consortium that has explored Hibernia.
The group includes Mobil Oil Canada Ltd., with 28.1 percent; Gulf Oil Canada Ltd., 25 percent; Petro-Canada, the state-owned firm, 25 percent; Chevron Standard Ltd., a subsidiary of Standard Oil Co. of California, 16.4 percent and Columbia Gas Development of Canada Ltd., a subsidiary of Delaware-based Columbia Gas Systems Inc., 5.4 percent.
So far, these companies, sometimes in conjunction with other corporations, have spent a total of $550 million drilling on the Grand Banks.
In addition to the political considerations, the current world oversupply of crude has raised doubts about the financing of expensive projects burdened with technological uncertainties.
In 1980, the Trudeau government introduced a wide-ranging National Energy Program that channeled increased oil revenues into the federal treasury.
Newfoundland's Premier Brian Peckford, who presides over 600,000 people traditionally ranked among the poorest of Canada's 24 million population, wants to use revenues from the offshore to invigorate the provincial economy.
The consortium may be able to put considerable pressure on Trudeau. The Hibernia field contains an estimated 1.8 billion barrels of high-quality oil, equal to about 40 percent of Canada's current reserves.
These potential supplies have assumed great importance to Canada, which is trying to avoid importing more crude as its traditional sources of oil in the western provinces slowly shrink. Other hoped-for substitutes, such as plants to produce synthetic oil from plentiful tar sands in Alberta province, have already fallen victim to changing petroleum economics in the past year.
Additionally, Canada, with its economy in the worst shape in half a century, badly needs the industrial spinoffs that a major project like Hibernia would create.
Plans are to pump 50,000 barrels a day initially, with the flow rising eventually to 150,000 barrels a day. At the moment, few observers see much chance of Hibernia starting up before the end of the decade.
The Ottawa-Newfoundland clash is the latest expression of recurrent tensions between Ottawa and provincial leaders over resource control.
While the country's 10 provincial governments hold constitutional jurisdiction over oil and gas within their boundaries, resources on the continental shelf fall within the responsibilities of the central government in Ottawa.
Peckford, however, claims his province is an exception. As a former dependency of Britain that joined Canada only in 1948, Newfoundland is the only Canadian province that was once an independent state. And Peckford argues Newfoundland did not give up jurisdiction over its offshore when it became part of Canada.