UPDATE 1-Exxon's Hebron project approved by regulators

* Hebron oil project approved by regulators

* Cost last pegged at C$5 bln to C$7 bln

* Will initially produce up to 150,000 bpd

CALGARY, Alberta, May 31 (Reuters) - The Canada-Newfoundland and Labrador Offshore Petroleum Board said on Thursday it approved plans by an Exxon Mobil Corp-led group to develop the Hebron oil field offshore Newfoundland.

The decision means Exxon and its partners can proceed with development of the 707-million barrel field, which will be the province’s fourth offshore oil project.

The cost of the project, which will use a heavy gravity-based structure sitting on the seabed because of the icebergs that sail through the area, was estimated in 2008 to range between C$5 billion ($4.85 billion) and C$7 billion.The field is operated by ExxonMobil, which has a 36 percent interest in the project. ExxonMobil took control of the project from Chevron in October 2008.

The Hebron field lies under 92 meters (300 feet) of water 350 kilometers (217 miles) southeast of St. John’s, Newfoundland and contains heavy oil. It was discovered in 1981, but development was delayed by low oil prices and squabbles over royalty rates with the provincial government.

The facility will produce up to 150,000 barrels per day and may be increased to handle as much as 180,000 bpd according to regulatory documents.

Exxon could not be immediately reached for comment.

The other joint venture partners are Chevron Corp, with a 26.7 percent interest; Suncor Energy Inc, with 22.7 percent; Statoil ASA, with 9.7 percent; and the provincially owned Energy Corporation of Newfoundland and Labrador, which has a 4.9 percent stake.