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
'A beautiful soul': Funeral held for baby boy killed in wrong-way crash on Highway 401
A funeral was held on Wednesday for a three-month-old boy who died after being involved in a wrong-way crash on Highway 401 in Whitby last week.
'Sophisticated' cyberattacks detected on B.C. government networks, premier says
There has been a "sophisticated" cybersecurity breach detected on B.C. government networks, Premier David Eby confirmed Wednesday evening.
Police handcuff man trying to enter Drake's Toronto mansion
Toronto police say a man was taken into custody outside Drake's Bridle Path mansion Wednesday afternoon after he tried to gain access to the residence.
Biden says he will stop sending bombs and artillery shells to Israel if they launch major invasion of Rafah
U.S. President Joe Biden said for the first time Wednesday he would halt shipments of American weapons to Israel, which he acknowledged have been used to kill civilians in Gaza, if Prime Minister Benjamin Netanyahu orders a major invasion of the city of Rafah.
Canucks beat Oilers 5-4 in comeback to take Game 1
The Vancouver Canucks won the first game of their NHL playoffs series with the Edmonton Oilers 5-4 on Wednesday night coming back from a three-goal deficit.
Nijjar murder suspect says he had Canadian study permit in immigration firm's video
One of the Indian nationals accused of murdering British Columbia Sikh activist Hardeep Singh Nijjar says in a social media video that he received a Canadian study permit with the help of an Indian immigration consultancy.
Pfizer agrees to settle more than 10K lawsuits over Zantac cancer risk: Bloomberg News
Pfizer has agreed to settle more than 10,000 lawsuits about cancer risks related to the now discontinued heartburn drug Zantac, Bloomberg News reported on Wednesday, citing people familiar with the deal.
Quebec premier defends new museum on Quebecois nation after Indigenous criticism
Quebec Premier Francois Legault is defending his comments about a new history museum after he was accused by a prominent First Nations group of trying to erase their history.
U.S. presidential candidate RFK Jr. had a brain worm, has recovered, campaign says
Independent U.S. presidential candidate Robert F. Kennedy Jr. had a parasite in his brain more than a decade ago, but has fully recovered, his campaign said, after the New York Times reported about the ailment.