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
NDP motion regarding Palestinian statehood passes after major Liberal alterations
A motion from the federal New Democrats initially calling on Canada to recognize the 'State of Palestine' passed amid widespread acrimony on Monday, after the Liberals drastically altered its wording to see the government simply work towards that aim as part of a two-state solution.
'He didn't want to die': Family of Calgary man killed in standoff speaks out
Family of a Calgary man killed after a 30-hour standoff with police last week are speaking out, sharing details of the tense and heart-wrenching experience.
Toronto family doctor who called patient's body 'perfect' suspended for 3 months: tribunal
A family doctor in Toronto has been suspended for three months after a disciplinary tribunal found that he failed to follow proper protocols while examining a patient's breasts and made inappropriate comments about her body.
Ohio mom who left toddler alone 10 days when she went on vacation pleads guilty to aggravated murder
An Ohio mother whose 16-month-old daughter died after being left home alone in a playpen for 10 days last summer while she went on vacation was sentenced Monday to life in prison with no chance of parole.
Retired teacher pleads guilty to paying for sex with 15-year-old in Collingwood, Ont.
In a Barrie courtroom on Monday, a retired high school teacher from the Niagara Region pleaded guilty to sexual touching and obtaining sexual services from a 15-year-old boy in Collingwood in 2021.
Hertz CEO out following electric car 'horror show'
The company, which announced in January it was selling 20,000 of the electric vehicles in its fleet, or about a third of the EVs it owned, is now replacing the CEO who helped build up that fleet, giving it the company’s fifth boss in just four years.
5 charged in Calgary kidnappings that targeted women
Calgary police have charged five men in a pair of kidnappings last year that targeted innocent victims.
Demand soars for solar eclipse glasses in Canada. Are they worth buying?
The demand for total solar eclipse glasses used to safely view the rare celestial event has been ramping up as sellers, along with astronomy and eye-care experts in Canada, warn that viewing the eclipse with the naked eye is dangerous.
Canadian commander of volunteer fighter group dies in Ukraine
A Canadian-born commander of the so-called Norman Brigade, a volunteer fighting group in Ukraine, has died.