Bay du Nord FPSO contract will be awarded in months but future undecided, says Equinor

While the future of the stalled Bay du Nord project has yet to be decided, an Equinor Canada representative says there are positive signs for the project's future, including a major contract that the oil giant will award in the next few months.

The project's hiatus was announced in May 2023 and at the time, the company blamed "challenging market conditions" that forced project costs skyward. 

"We are now pretty much ready to select a tier-one FPSO contractor," Equinor Canada's country manager Tore Løseth told reporters on Thursday.

Løseth, who was attending the final day of Energy N.L.'s annual conference in downtown St. John's, also reiterated previously announced plans for a phased approach, first launching production in the two most promising fields: Bay du Nord and Cambriol.

"We have now a path forward that we think can work. We really hope so. We're not there yet," he said.

Equinor will lease the FPSO and the other company will operate it on Equinor's behalf, which Løseth says isn't uncommon in the industry and is a cost-saving measure.

Equinor says it will make a financial investment decision by 2027 and if it moves forward, first oil would come in 2031.

Even without the decision, Løseth says issuing contracts for work is necessary in Bay du Nord's case.

"Since this is a complicated project to get across, we need all the good ideas we can have and we need all the experts on board. So this project, we are getting the contractors on board a little bit earlier than we usually do."

Løseth says his team has done a lot of work to change the project and it's now stronger, but prices have continued to climb in the last two years. That means additional work with contractors.

"I cannot promise you today, but I really hope that we can make it a sanctionable project," said Løseth.

'We'll be shattered'

Rob Strong, the founder of Rob Strong and Associates, says much is riding on the project for the province more broadly, adding companies will be "devastated" if it doesn't go ahead.

"I think we'll be shattered, basically. We need another project. Yes there's lots of activity and lots of employment and ongoing steady, stable operations for Hibernia, Hebron, Terra Nova and White Rose," he said.

"But many companies here in Newfoundland are gearing up for the actual fabrication and the subsea installations."

Strong is optimistic the project will ultimately be approved, though he says the company has a tight deadline if it wants to get first oil by 2031.

"It's a very tight timeline for three years to finally commit for construction and get [the FPSO] constructed," said Strong.

Premier John Hogan, speaking to conference attendees before Løseth's update on Equinor, had a positive outlook on the project's future.

"At the first ministers' meeting this week in Saskatchewan I was proud to explain to my fellow premiers and the prime minister the real, substantial, nation-building opportunity we hold here in Bay du Nord," said Hogan.

When speaking with reporters, Prime Minister Mark Carney included Bay du Nord on a list of potential projects that could be fast-tracked under a new approval process because of their nation-building importance.

Løseth says he appreciates Carney mentioning the Bay du Nord project, but added it wasn't for Løseth to decide if it should be considered a "nation-building project."

"We are just focused on delivering Bay du Nord," he said.

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