Newfoundland and Labrador Gives Green Light to Bay du Nord

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Written by Daniel Graeber for IIR News Intelligence (Sugar Land, Texas)

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Summary

Newfoundland and Labrador gave the go ahead for its first-ever deepwater project in its territorial waters of the Atlantic. BP and Equinor expect first oil from Bay du Nord by 2031.

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A First for Canada

The provincial government in Newfoundland and Labrador said it opted to advance the Bay du Nord offshore oilfield after reaching agreements with Equinor and BP.

"Agreements on life-of-field benefits, royalties and an equity option have been reached with partners Equinor and BP," the provincial government said.

This would be the first deepwater project ever for the Canadian waters of the Atlantic.

Equinor last year handed out separate contracts to BW Offshore and Altera Infrastructure to support the development of a floating production and storage vessel slated for a field off the coast of Newfoundland and Labrador.

The first oil discovery was made by Equinor in 2013, followed by a series of additional finds in 2014, 2016 and 2020. Citing high inflation, Equinor and its partner, BP, opted to suspend work on the project in 2023 for up to three years.

It started to return to life, however, in 2024 when SLB, formerly Schlumberger, signed a long-term collaboration agreement with Equinor and the Subsea Integration Alliance, a group made up of counterparts OneSubsea and Subsea 7, to help drive the project.

"The agreement provides greater clarity and confidence as we continue moving the project toward a potential final investment decision next year," Tore Loseth, the regional president for Equinor, said Tuesday.

Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can learn more by viewing the project report.

More Momentum for Canadian Oil, Economy

The Bay du Nord field is estimated to hold about 300 million barrels of oil equivalent reserves.

"It puts Newfoundland and Labrador back on the map for global oil and gas investment," the provincial government said.

The federal Natural Resources Canada said the provincial offshore industry contributes almost 20% to Newfoundland and Labrador's gross domestic product. It also accounts for about half of its exports, given it strategic access to overseas markets. The federal government added that offshore production has a greenhouse gas footprint that's 30% below the global average.

"The offshore oil and gas sector has made a strong contribution to Canada's economy and is a key component of Newfoundland and Labrador's economy, employing thousands of people," said Francois-Philippe Champange, the federal finance minister. "The Bay du Nord project would represent a significant investment in the province--and in Canada--and position the Canadian offshore sector as a best-in-class investment destination."

Canada is working to diversify its trade arteries as bilateral relations with the United States, its largest trading partner, collapse. Prime Minister Mark Carney has backed a handful of nation-building projects, from liquefied natural gas to nuclear power, that would help with that effort.

With investments at around US$10.3 billion, the floating facility will serve as the anchor for broader drilling. First oil is expected by 2031, with a peak production capacity of between 160,000 and 175,000 barrels per day.

The federal Canadian government sanctioned the project in 2022.

By the Numbers

• 2031 first oil for Bay du Nord
• 175,000 barrels per day possible

Key Takeaways

• Canada to tap deepwater oil.
• Floating storage facility to park over Bay du Nord.

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).