Newfoundland and Labrador Premier Danny Williams announced today that his province has reached a deal with industry partners that will see the massive Hebron offshore oil project move ahead.

"Today marks a historic day for Newfoundland and Labrador, as we move into a new era of offshore oil development with unprecedented benefits to the people of our province," he told a press conference in St. John's.

Williams, with a provincial election less than two months away, said that a Memorandum of Understanding (MOU) with industry partners has been reached and will include a $110 million investment by the province.

In return, the province has secured 4.9 per cent equity stake in the project.

The MOU was made after a year-long impasse. It's a frame-work for a final deal that's expected to be signed within a few months.

"Determination and strength of conviction has been our government's guide and today we are proud to present a tremendous agreement for the people of the province, with a fair and reasonable return for our industry partners," said Williams.

In addition to the equity stake, the province also negotiated an improved royalty regime that will see projected revenues for the province of $16 billion over the 25-year life of the project - assuming oil in the $70-per-barrel range.

Williams said the federal government and Canadians will also enjoy more than $7 billion in revenues from the project.

Last year, the project was abandoned when the oil companies wanted tax breaks in exchange for the equity stake. Williams said the companies backed off from those demands in the latest round of talks.

Instead, the province chipped in an extra $10 million for equity, and reduced the 'super royalty' rate by 0.5 per cent.

"There have been many critics and naysayers, especially outside our province. I would say to those people today, to never underestimate the determination and strength of Newfoundlanders and Labradorians," said Williams.

ExxonMobil Canada is the largest equity holder in Hebron with a 38 per cent stake. Chevron holds a 28 per cent stake, Petro-Canada at 24 per cent and Norsk Hydro Canada Oil and Gas Inc. at 10 per cent.

Chevron Canada is the designated operator for Hebron, the province's fourth offshore oil development -- and the first in several years.

"We see that this MOU balances the expectations for the government, or its desire for developing the resrouce. But it also meets our shareholders' expectations," Chevron Canada vice president James Bates told NTV News.

Hebron, located 340 kilometres southeast of St. John's, is estimated to have 700 million barrels of reserves.

Williams, with an election set for Oct. 9, has been criticized for insisting upon an ownership stake for the province. But in his home province, the premier has received support in his battle with international oil companies and in his feud with Prime Minister Stephen Harper over equalization.

N.L. Liberal Leader Gerry Reid said the final deal has yet to be signed, and that the premier's negotiating tactics had ended another possible deal in 2006.

"What strikes me today is that the oil companies are not sitting at the table," he said, noting that Williams led Wednesday's press conference.

"That says something to me. If the deal was close to being done, I think all partners would have been sitting at the table."

Lorraine Michael, the province's NDP leader, expressed concern over the 4.9 per cent equity stake, which could mean a major financial risk for Newfoundland and Labrador.

"I think that if the companies have agreed to an equity share, I think it's sort logical that they would be asking us to taking on some liability. So what are those liabilities?"

The equity stake means the province will have to pay for 4.9 per cent of construction costs, but Williams said that money would be quickly recovered once the project starts selling oil.

"If I could put my money in this investment, I'd put it there without blinking an eyelash," he said.

The Hebron project could start producing oil by 2015.

With a report by NTV's Michael Connors