Canada Approves Bay du Nord Oil Project – Massive Boost for Newfoundland – Labrador

The Canadian government has approved the Bay du Nord oil project off the coast of Atlantic Canada proposed by Norway’s Equinor ASA.

Federal Environment Minister Steven Guilbeault formally approved the Bay du Nord offshore oil megaproject Wednesday, making a decision that will infuriate environmentalists but boost the Newfoundland and Labrador economy.

In a statement Guilbeault said he has determined that the project would not cause “significant adverse environmental effects” with the implementation of mitigation measures.

“We accept the conclusions of the Impact Assessment Agency of Canada on the Bay du Nord project,” Guilbeault said while speaking with reporters.

Guilbeault said the decision was difficult to make, but pointed out that the project is subject to 137 conditions, including one that the project would have to meet net zero emissions by 2050.

In a statement Wednesday evening, Equinor called the federal environmental decision “an important milestone” for the project.

“We now look forward to progressing this key investment in Canada – which has the potential to produce the lowest carbon oil in the country,” said the company’s statement.

The Bay du Nord project would involve building a floating platform to drill an estimated resource of 300 million barrels of light crude oil over 12 to 20 years in the ocean near Canada’s Newfoundland and Labrador province.

BP and Cenovus

The Bay du Nord project consists of multiple oil discoveries containing at least 300 million recoverable barrels, according to Equinor. Other estimates have put the recoverable oil two to three times higher. However, it is unlikely to start producing oil until the end of this decade.

Based on 300 million barrels, Equinor has said the project would produce C$3.5 billion  in government revenue and create thousands of jobs in Newfoundland.

The environmental assessment process for the project started in 2018. It will be Canada’s first deep-water drilling site and proposes to use a floating production, storage and offloading vessel. Cenovus Energy Inc. and BP Plc are partners with Equinor in the project.

“Equinor is pleased with the strong support that the Bay du Nord project has received from stakeholders,” the company said in an emailed statement. “We now look forward to progressing this key investment in Canada –- which has the potential to produce the lowest carbon barrels of oil in the country.”

The approval means Bay du Nord is poised to become the first major new Canadian oil production site since Suncor Energy Inc.’s Fort Hills oil-sands mine began operation in 2018. The most recent new production platform off the Newfoundland coast was Exxon Mobil Corp.’s Hebron project, which started pumping oil in 2017.

Equinor and partner Cenovus Energy have not yet made a final investment decision on whether to build the project, located in the Flemish Pass basin roughly 500 kilometers off the coast of Newfoundland and Labrador.

Bay du Nord would be Canada’s first remote deepwater project at around 1,200 meters deep. Other offshore platforms in the Atlantic region are significantly shallower.