Page 4 - NorthAmOil Week 06 2023

NorthAmOil COMMENTARY NorthAmOil

Equinor receives licence for

discovery off Newfoundland

The Newfoundland and Labrador oil regulator has licensed Equinor’s

Cappahayden K-67 discovery, which is thought to be significant

NEWFOUNDLAND THE Canada-Newfoundland and Labrador Off- – Mizzen, Baccalieu and Harpoon – are thought
AND LABRADOR shore Petroleum Board (C-NLOPB) has issued to account for a combined 186mn barrels.
a licence to Equinor for the Cappahayden K-67 This puts the total estimate for oil reserves
WHAT: discovery. The board estimates that it holds at the projects linked to Bay du Nord so far at
The Canada- about 385mn barrels of recoverable oil. It is the 979mn barrels.
Newfoundland and C-NLOPB’s first such licence to be issued in two Equinor is also the majority owner of Mizzen,
Labrador Offshore years. Harpoon and Baccalieu. The Norwegian com-
Petroleum Board has The field, located in the Flemish Pass Basin pany has eight “significant discovery” licences
licensed Equinor’s about 500 km east of St. John’s, Newfound- off Canada so far.
Cappahayden K-67 land, was discovered in 2020. It is owned 60%
discovery. by Equinor and 40% by BP. Equinor told Reu- Planning ahead
ters that it was now gauging how much of the Bay du Nord, for which Equinor is targeting a
WHY: discovery’s oil is economically and technically final investment decision (FID) for later this year
The discovery has an recoverable. or in 2024, would become Canada’s first deepwa-
estimated 385mn barrels Developing Cappahayden would involve a ter offshore oil project,at water depths of 1,200
of recoverable oil. subsea tie-back to Equinor’s high-profile Bay du metres.
Nord project, which would in turn use a float- First oil is anticipated in the late 2020s, if an
WHAT NEXT: ing production, storage and offloading (FPSO) FID is made. In April 2022, the federal Canadian
Oil companies are unit. Cappahayden is located at water depths of Ministry of Environment approved the project’s
continuing to focus around 1,000 metres. environmental assessment, with Newfound-
on offshore drilling, Bay du Nord is remote, located 500 km off the land and Labrador having lobbied for a positive
including in Canadian coast. Indeed, it is in international waters and decision.
waters. Canada would have to pay the United Nations At the time, the federal government also
royalties if it is developed. This would be a first called for new requirements for Bay du Nord
globally and could be seen as proof of the grow- and other oil and gas projects as part of its
ing attractiveness of offshore oil projects. goal to reach net-zero greenhouse gas (GHG)
The new estimate for Cappahayden suggests emissions by 2050. Canada Action, a group
that the region may contain almost 1bn bar- that backs oil development, has noted that the
rels. An estimated 407mn barrels is estimated region’s light oil has a relatively low carbon
to be held at Bay du Nord itself, and three intensity.
other linked projects also in the Flemish Pass Equinor anticipates that Bay du Nord would

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