Fate of Bay du Nord project still up in the air, says Equinor

Norwegian energy giant Equinor is maintaining its holding pattern, with no decisive word on the fate of what could be Canada's first deepwater oil project.

But the head of Equinor Canada, Tore Løseth, is optimistic the project will eventually get sanctioned.

Approximately 18 months ago, Equinor announced it was shelving the Bay du Nord project for at least three years, citing a significant increase in costs in part due to a volatile market.

Løseth gave an update during a conference in St. John's on Thursday, organized by the Atlantic Economic Council.

"Bay du Nord, if we can make that happen, will be the next super-project for the province. You know, we're talking many billions of dollars to just get it started," Løseth told the conference room filled with business community members.

He believes the project will still be sanctioned by the company, and said to cut costs Equinor is working on a smaller, phased approach to developing it.

"We will start with the best discovery, or maybe the couple best discoveries," Løseth said, adding that the other discoveries will be phased in at a later date.

He also cited the project's benefits to the province such as taxes, royalties, income as well as jobs that would be both indirect and direct.

Løseth also shared a prediction that any future oil and gas project in Newfoundland and Labrador would be based around subsea tie-ins, which are flowlines used to transport crude oil and gas between structures.

"If you think about the fields we already have, Hibernia, Hebron, Terra Nova, White Rose, you know, they're already out in the so-called Jeanne d'Arc Basin — there's a lot more oil in the Jeanne d'arc Basin," he said.

"But there is probably not a single accumulation that is big enough for a new independent development. But there is a lot more oil that can be developed through subsea ties to that established infrastructure."

Bay du Nord is in deeper waters, approximately 1,000 metres, and is a series of five smaller oil discoveries that are clustered together. Løseth said they need to develop it through subsea tie-ins that will tie into a floating production, storage and offloading unit.

Oil part of energy transition

Equinor has pledged to be net zero by 2050 and is investing in renewable energy. Løseth said oil and gas still has a part to play in reaching that goal.

"Our corporate strategy is based on the energy transition or rooted in the energy transition because we want to be a company that is an energy company that is relevant in the very long future," he said. "We want to be part of the energy transition and be part of shaping that."

Equinor is building up both the renewable and low carbon side of its business, he said.

Løseth added it's an integral part to the energy transition strategy because that energy is needed for many years to come and the money from oil will help fund the energy transition.

For example, he said, it will take a long time for hydrogen projects to come online and a lot of investment before it's a business model.

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