Page 4 - NorthAmOil Week 14 2022

NorthAmOil COMMENTARY NorthAmOil

Canada approves offshore

Bay du Nord project

The Canadian government has approved Equinor’s $12bn Bay du

Nord project offshore Newfoundland and Labrador, which stands

to be the country’s first remote deepwater development

NEWFOUNDLAND THE Bay du Nord project offshore Newfound- – then known as Statoil – made the first Bay du
AND LABRADOR land and Labrador took a significant step for- Nord discovery in 2013, and the project’s poten-
ward this week when it was approved by the tial was then bolstered by additional finds in the
WHAT: Canadian government. The project is estimated area in 2015, 2016 and 2020.
The Canadian government to cost $12bn and is being developed by Nor- According to Equinor’s website, the con-
has approved Equinor’s way’s Equinor, alongside minority partner Ceno- firmed Cappahayden and Cambriol East
Bay du Nord project. vus Energy. discoveries in 2020 in the adjacent EL1156
A final investment decision (FID) has yet exploration licence are also potential tie-ins for
WHY: to be made. If it is, Bay du Nord stands to be a joint project development. The company is
Ottawa is trying to Canada’s first remote deepwater development, planning to drill more exploration wells at Cam-
balance its environmental located around 310 miles (499 km) off the coast briol East and Sitka this year. It partners with
goals with contributing to of Newfoundland and Labrador in water depths BP on the Cappahayden and Cambriol Central
global energy security. of roughly 4,000 feet (1,219 metres). discoveries.
The project’s federal approval on April 6 Equinor is considering deploying a floating
WHAT NEXT: illustrates how Ottawa is trying to balance its production, storage and offloading (FPSO)
An FID on Bay du Nord environmental goals with continuing to pro- vessel at Bay du Nord, which it notes is also a
is still pending, but the duce oil and gas in a bid to contribute to global suitable option for the tie-back of adjacent dis-
approval represents a energy security. Indeed, before the approval coveries. It is expected that a new FPSO would
major step forward for was announced, the government said it would need to be constructed for the project.
the project. develop requirements for new oil and gas pro- Bay du Nord is estimated to hold around
jects – including Bay du Nord – to have net-zero 300mn barrels of recoverable reserves and
greenhouse gas (GHG) emissions by 2050. The the FPSO is expected to have the capacity to
approval nonetheless came under fire from produce up to 200,000 barrels per day (bpd).
environmental groups, even as it was welcomed Equinor has previously said that the project
by the Bay du Nord partners and other industry would have a breakeven cost of less than $35
players. per barrel – making it all the more economically
attractive against the backdrop of oil prices sit-
Offshore potential ting around $100 per barrel.
Bay du Nord is located in the Flemish Pass Basin Equinor welcomed the decision, saying it
– a frontier offshore region for Canada, where oil continued its work to “mature” the Bay du Nord
and gas potential has yet to be tapped. Equinor development in co-operation with BP and

Equinor is considering
deploying an FPSO at
Bay du Nord.

P4 www. NEWSBASE .com Week 14 07•April•2022