ST. JOHN’S, Newfoundland and Labrador, Canada – Canada’s first deepwater oil project has been shelved for three years “in the face of challenging market conditions,” according to Norwegian state oil company Equinor.
As reported by the Canadian Broadcasting Corp. (CBC), Equinor sent out a press release to this effect in late May during the Energy N.L. Conference and Exhibition in St. John’s.
“We will utilize this postponement to continue to actively mature Bay du Nord towards a successful development,” said Tore Løseth, head of Equinor Canada, as reported by the CBC. A spokesperson said that the project has incurred “significant cost increases” in recent months, due in part to a volatile market.
Trond Bokn, senior vice-president of project development, said that the project is still important for Equinor. “We will now look at the project again to see if we can do further optimizations to our concept and strategies,” the CBC quoted Bokn as saying.
Bay du Nord is made of up five oil discoveries. Equinor said that it will continue to assess exploration drilling around the field in 2024.
Charlene Johnson, the head of Energy N.L., addressed the news at the conference shortly after Equinor broke the news. “Clearly this is extremely disappointing news for everyone in this room, and the entire industry and our province,” Johnson was reported to have said. She noted that the project has already seen numerous delays.
The news also comes less than two months after Equinor contracted a Canadian company to carry out the front-end engineering design (FEED) work on the project. According to the CBC reporting, Canadian energy analysts indicated that it is likely that the cost estimates for the project have been coming in, and are reflecting worldwide difficulties in sourcing materials from troubled supply chains.
Johnson said that Energy N.L. will remain in contact with Equinor over the coming weeks and still feels there are reasons for optimism. “This is just another bump in the road to what we still feel will be a successful project,” she said.