Equinor postponing Bay du Nord oil project off Newfoundland for up to three years
the premier of Newfoundland and Labrador played it cool Wednesday as Norwegian energy giant Equinor announced it was suspending plans to develop a $16-billion oil project in the province's offshore.
Andrew Furey said the news that Equinor would postpone the Bay du Nord project for up to three years came as a surprise. But he said he remains confident the oilfield would still be developed.
"Of course we're disappointed in the delay, but I would caution everybody that it's just that: it's a delay," he told reporters, adding that Equinor has not given any indication it was interested in walking away from the development.
"The resource is still there. It's not going anywhere," Furey said.
Bay du Nord comprises five different discovery areas off the province's east coast that are said to hold a total of 979 million barrels of recoverable oil, according to recent estimates from Newfoundland and Labrador's offshore oil regulator. The development would open the province's fifth offshore oilfield and be its first deepwater oil project.
Newfoundland and Labrador's latest budget factored in economic gains from the Bay du Nord project beginning in 2025.
Equinor announced its "strategic postponement" of the project in a news release Wednesday as the province's annual energy industry conference was taking place in downtown St. John's, N.L. It said Bay du Nord had seen significant cost increases in recent months, mostly due to volatile market conditions.
Though the company had not yet confirmed it would make the full investment necessary to carry the project through to completion, there was early-phase work underway, including concept studies and assessments, spokesperson Alex Collins said in an email. She said the company will use the delay to "optimize" the project and work toward a "successful development."
Equinor reported a net profit of $28.7 billion in 2022, up from $8.6 billion a year earlier.
The postponement is the second bout of bad news for Newfoundland and Labrador's offshore industry this year. The Terra Nova oilfield, which is majority owned by Suncor Energy, is also delayed. The field hasn't produced oil since 2019, and during the height of the COVID-19 pandemic it seemed Suncor and its partners would abandon it entirely.
The provincial government ultimately gave Suncor $205 million to guarantee the company would carry on with work to extend the life of the field by about 10 years. The province also made adjustments to its royalty scheme to give Terra Nova owners another $300 million over that decade.
Suncor had hoped the field would be back in operation at some point this summer, but it has since removed any production or income forecasts from the project from its financial outlooks for the year.
Furey said any worry now about the two oil projects is "nowhere near" the anxiety that gripped his government during the pandemic when it seemed that Suncor would walk away from Terra Nova. "That is not the environment we're in right now," he said.
The federal government gave Bay du Nord environmental approval last April, drawing sharp criticism from environmentalists. Equinor and the Newfoundland and Labrador government have said the project will produce far fewer greenhouse gas emissions during extraction than any other project in Canada. But environmentalists and climate scientists counter that the bulk of the greenhouse gas emissions from fossil fuels are produced when they are burned.
On Wednesday, Sierra Club Canada said the latest news shows Newfoundland and Labrador must wean itself off revenues from offshore oil. "We know that expanding oil and gas extraction ... is unacceptable and that climate change will only be worse in three years time," spokesperson Connor Curtis said in a news release.
This report from The Canadian Press was first published on May 31, 2023
CTVNews.ca Top Stories
Former homicide detective explains how police will investigate shooting outside Drake's Bridle Path mansion
Footage from dozens of security cameras in the area of Drake’s Bridle Path mansion could be the key to identifying the suspect responsible for shooting and seriously injuring a security guard outside the rapper’s sprawling home early Tuesday morning, a former Toronto homicide detective says.
RCMP not investigating possible foreign interference cases related to Chiu, Dong: Duheme
Canada's federal police force is not investigating any possible instances of foreign interference in the cases of former Conservative MP Kenny Chiu and Liberal-turned-Independent MP Han Dong, RCMP Commissioner Mike Duheme says.
Stormy Daniels describes meeting Trump during occasionally graphic testimony in hush money trial
Stormy Daniels took the witness stand Tuesday at Donald Trump's hush money trial, describing for jurors a sexual encounter the porn actor says she had with him in 2006 that resulted in her being paid off to keep silent during the presidential race 10 years later.
Bye-bye bag fee: Calgary repeals single-use bylaw
A Calgary bylaw requiring businesses to charge a minimum bag fee and only provide single-use items when requested has officially been tossed.
Air France flight from Paris to Seattle lands in Iqaluit after heat smell in cabin
A plane travelling from Paris to Seattle was forced to make an emergency landing in Iqaluit after there was a heat smell in the cabin during the flight.
CFL suspends Argos QB Chad Kelly at least nine games following investigation
The CFL suspended Toronto Argonauts quarterback Chad Kelly for at least nine regular-season games Tuesday following its investigation into a lawsuit filed by a former strength-and-conditioning coach against both the player and club.
Boy Scouts of America changing name for first time in 114 years, aiming for inclusivity
The Boy Scouts of America is changing its name for the first time in its 114-year history and will become Scouting America. It's a significant shift as the organization emerges from bankruptcy following a flood of sexual abuse claims and seeks to focus on inclusion.
Federal government grants B.C.'s request to recriminalize hard drugs in public spaces
The federal government is granting British Columbia's request to recriminalize hard drugs in public spaces, nearly two weeks after the province asked to end its pilot project early over concerns of public drug use.
opinion Tom Mulcair: Trudeau's handling of Poilievre's 'wacko' House turfing a clear sign of Liberal desperation
When Speaker Greg Fergus tossed out Pierre Poilievre from the House last week, "those of us who have experience as parliamentarians simply couldn't believe our eyes," writes former NDP leader Tom Mulcair in his column for CTVNews.ca