Fri. Feb 23rd, 2024

Bay du Nord: all options available the study to save the project

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Tore Løseth, Equinor's head of Canada, provided an update on Bay du Nord on Friday in his first television interview since the oil project was postponed eight months ago.

  • Patrick Butler (View profile)Patrick Butler

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Energy giant Equinor is evaluating all its options to save the Bay du Nord oil project, put on hold eight months ago due to of the explosion in the cost of construction.

Tore Løseth, Equinor director responsible for Canada, is still optimistic despite the project being postponed for up to three years. He recognizes, however, that Bay du Nord's bill is still far too high for it to be profitable.

The project simply needs to be improved to make it feasible. It won't be easy, but we are working hard to reduce costs.

A quote from Tore Løseth, director responsible for Canada, Equinor

We must analyze all possible options, he continues at the microphone of Radio-Canada, in his first television interview since the announcement of the postponement of Bay du Nord.

Equinor launched four calls for expressions of interest earlier this month to seek third-party support to make Bay du Nord profitable. The Norwegian company is even considering leasing an existing production, storage and unloading vessel instead of building a new one.

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The Progressive Conservative opposition in Newfoundland and Labrador fears possible impacts on the construction sector, which wants to make the most of the project, the bill for which has been estimated at $16 billion in 2023. Equinor indicates that this projection is no longer up to date.

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The production, storage and unloading vessel as it had been envisaged by Equinor before the project was postponed last May. The Norwegian company is currently evaluating the option of leasing an existing vessel instead of building one.

What I can tell you is that if Bay du Nord sees the light of day, there will be a lot of jobs and a lot of revenue for the province. I am sure of it, assures Tore Løseth.

He adds that even if Equinor decides to rent a production vessel, there will be several opportunities for local builders to help manufacture the project's underwater components.

Equinor had also promised that Bay du Nord, thanks to cutting-edge technologies, would be the lowest-emitting project in the history of the Canadian oil industry. Tore Løseth argues that reducing emissions is still at the heart of the project, even if the company decides it is better to extract the black gold with an existing vessel.

Tore Løseth does not specify the current bill for the project. He also did not want to comment on potential production volumes. Before the Bay du Nord postponement, a shock decision that shook the local oil industry last May, Equinor estimated it was extracting 200,000 barrels of crude oil per day.

According to Equinor, the oil field in the Bay du Nord sector has at least 500 million barrels of recoverable oil. The Canada-Newfoundland and Labrador Offshore Petroleum Board believes the deposit could contain up to 1 billion barrels.

Bay du Nord would be located 500 km east of Newfoundland in waters 1200 m deep. The four projects currently in production offshore the province are approximately 350 km east of the island, in waters only 100 m deep. Bay du Nord therefore represents a new frontier for the provincial oil sector. The future of the sector is closely linked to that of the project, according to experts.

Tore Løseth points out that exploration work is continuing to verify how much oil Equinor could recover from the project. The Hercules drilling rig, currently in Namibia, will be used next summer to drill a new exploratory well.

This is a signal that we still believe in Bay du Nord, he emphasizes. Such a drilling project is expensive.

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