The Government of Newfoundland and Labrador has finalized a framework agreement with Equinor (formerly Statoil) and Husky Energy to develop the province's first remote deepwater production project at Bay du Nord. The agreement was announced by Premier Dwight Ball on July 26, 2018.
“Today marks the global recognition of Newfoundland and Labrador as a preferred location for deepwater production," said Premier Ball in a news release. "Equinor and Husky’s commitment and investment in this project highlights the attractiveness of our industry and the potential that exists within this province in our offshore...With today’s announcement, we take our first step into the new frontier, we mark a new era of deep-water exploration as well as the opening of a new basin – the Flemish Pass. The future of our offshore begins today.”
Discovered in 2013, the Bay du Nord is expected to be sanctioned in 2020 with first oil in 2025.
The Bay du Nord project has reserves of nearly 300 million barrels of oil and opens up a new basin in the Flemish Pass. This is the first project negotiated under Newfoundland and Labrador's generic oil royalty regulations and aligns with the province’s Advance 2030 – The Way Forward on Oil and Gas, a plan developed to position the province as a globally preferred location for oil and natural gas development.
Some of the expected benefits of the project to Canadians:
- In-province employment of 22.3 million person hours over the life of the project, or about 11,000 person years;
- More than $14 billion in economic activity (in 2017 dollars);
- Estimated $3.5 billion in government revenues;
- Expected in-province fabrication of 5,000 metric tonnes;
- Focus on subsea engineering and new fabrication capabilities;
- A minimum of $75 million in research and development and education and training expenditures over 10 years to position Newfoundland and Labrador as a deepwater centre of excellence; and
- Provincial equity stake of 10 per cent.
Read the Government of Newfoundland’s press release here.