Exxon Mobil Corp. (XOM)'s plans to develop a $14 billion underwater oil field off Newfoundland's coast allows the world’s biggest energy company to hedge against discounted crude from Canada’s oil sands.

"The better pricing is definitely an issue," Brian Youngberg, an analyst at Edward Jones & Co. said by phone from St. Louis on Jan. 4. "While things could change in the time it takes to finish the project, it’s a great way for Exxon to hedge their pricing."

The investment to capture 700 million barrels of heavy undersea crude at the field about 350 kilometers (218 miles) southeast of St. John’s rivals spending in Alberta’s oil sands, where the estimated 170 billion barrels of recoverable reserves attracted C$23 billion ($23.2 billion) in spending last year. Newfoundland and Labrador oil is priced off the global benchmark, almost twice as high as western Canada’s heavy crude, and will help Exxon add to profit growth.

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