Canada Plans to Green-Light Equinor's Bay du Nord Offshore Project
The government of Canada is planning to green-light Equinor's Bay du Nord offshore oil project, according to Canada's CBC.
The controversial $12 billion development would unlock about 0.3-1.0 billion barrels of oil from several fields off the coast of Newfoundland and Labrador. It would create at least $2.8 billion in revenue for Canada's government, according to Equinor, and would lead to the creation of thousands of jobs in politically important regions of Atlantic Canada. Survey data suggests that the overwhelming majority of voters in the region support the project.
The development consortium, consisting of Equinor, Cenovus and BP, plans to use an FPSO to bring the project into commercial production. It would be the first offshore development off Newfoundland since the commissioning of the Hebron project in 2017.
Equinor has expanded its portfolio of discoveries in the Bay du Nord area since 2013, with additional finds in 2015, 2016 and 2020. All are in water depths of 2,100 to 3,800 feet, and there are additional possibilities for exploration wells nearby. Assuming a positive final investment decision, first oil would be produced towards the end of the decade.
Environmental groups in Canada have opposed the project, noting that the production of one billion barrels of oil is equal to a year's worth of emissions from 7-10 million cars. The administration of Canadian Prime Minister Justin Trudeau is expected to argue that the production-related emissions from Bay du Nord will be relatively low when compared with oil from other sources.
Equinor had additional positive news to report this week. Together with its partners, it has discovered an oil and gas reservoir of "excellent quality" at the Kveikje field in the Norwegian North Sea. Equinor holds a 51 percent stake in the project and serves as the operator.
The partners estimate that the recoverable resources are in the range of 28-48 million barrels of oil equivalent at Kveikje. Since it is located near Equinor's Troll B and Troll C platforms, it could be developed as a tie-back, along with a cluster of other recent finds in the area.