10/11/2012 02:37 EDT | Updated 12/11/2012 05:12 EST

Newfoundland and Labrador cuts deal in dispute over Hebron oil project

ST. JOHN'S, N.L. - Newfoundland and Labrador will receive $150 million in compensation in a dispute over whether a piece of equipment that's to be used on the Hebron offshore oil project should be built in the province.

ExxonMobil wants to build the smallest of three platform modules — the derrick equipment used for drilling — outside Newfoundland.

In a news release, Natural Resources minister Jerome Kennedy says going to arbitration in the dispute would have been risky for the province.

Hebron, the province's fourth major offshore oil site, is believed to contain about 700 million barrels of recoverable oil or more, which could generate $20 billion for the province over 30 years.

The province says it will use the $150 million on education and health-care programs.