The company’s project development senior vice president Trond Bokn said that owing to the changing market with rising costs, the offshore Canadian oil project will be reviewed again to see if there is any scope for further optimising the concept and strategies
The Bay du Nord project is made up of various oil discoveries in the Flemish Pass basin. (Credit: Anita starzycka from Pixabay)
Equinor said that it will defer the Bay du Nord project, a proposed offshore oil field development, in Newfoundland and Labrador, Canada, for up to three years, citing significant cost increases.
The Bay du Nord project, which was previously estimated to cost around $12bn, is made up of various oil discoveries in the Flemish Pass basin. First oil from the project has been anticipated to be drawn in the late 2020s.
The recoverable resources from the discoveries are estimated to be nearly 300 million barrels of oil.
Equinor’s project development senior vice president Trond Bokn said that owing to the changing market with rising costs, the company will review the Bay du Nord project again. This will be to see if there is any scope for further optimising the concept and strategies for the project, reported Reuters.
Bokn, however, said that Bay du Nord is an important project for the company.
Newfoundland & Labrador Premier Andrew Furey expressed his disappointment about the project news on Twitter, but said that he is still hopeful that it will proceed.
Furey tweeted: “We recognise the company believes strongly in the project and is continuing its commitment to Newfoundland and Labrador as its is maintaining its office presence and employees.”
Equinor has been considering to develop the Bay du Nord field with a floating production unit for storage and offshore offloading (FPSO). The company said that the FPSO is an appropriate solution for tie-back of nearby discoveries and future prospects.
BP is the partner of Equinor in the Bay du Nord project. The former joined the project through last year’s asset swap deal with Cenovus Energy.
In April 2022, the Canadian government approved the environmental assessment of the deepwater oil project.
In 2018, the Norwegian oil and gas firm finalised an agreement with the Newfoundland and Labrador province and Husky Energy for the development of the deep-water project, located nearly 500km northeast of St. John’s. Husky Energy merged with Cenovus Energy in 2021.
In April 2023, KBR said that it received a letter of intent (LOI) from Equinor Canada to execute the front-end engineering design (FEED) of the topside facilities of the new Bay Du Nord FPSO.