Canada approves Bay du Nord deepwater oil project offshore Newfoundland

7 April 2022

Canada has approved a US$12 billion deepwater oil project offshore Newfoundland and Labrador proposed by Norway’s Equinor. The Bay du Nord project (BdN) has been estimated to produce at least 300 million barrels of oil over a 30-year lifespan, and bring some $2.8 billion (C$3.5 billion) in revenues for the Canadian government.

The approval was a politically awkward decision for Ottawa, as Canada has adopted an ostensible goal to become a net-zero GHG emitter by 2050. The move was strongly criticized by environmental groups.

The project will be Canada’s first deep-water drilling site. It proposes to use a floating production, storage, and offloading vessel. Equinor partnered for this project with Canada’s Cenovus Energy (a 35% stake) and BP.

The Bay du Nord consist of several oil discoveries in the Flemish pass basin, some 500 km northeast of St. John’s, Newfoundland and Labrador, Canada. The first discovery was made by Equinor in 2013, followed by additional discoveries in 2015, 2016 and 2020.

Equinor plans to drill two exploration wells this year. Bay du Nord may start producing oil around the end of this decade.

Source: The Globe and Mail