Rising Costs Delays on Equinor’s Bay du Nord Offshore Oil Project

On Wednesday, Equinor ASA announced that its controversial Bay du Nord project will be postponed for up to three years due to cost increases.

The Norwegian company said in an email press release that it has experienced considerable cost increases in recent months due to the development of the offshore oil field, located about 500 kilometers off the coast of Newfoundland.

Despite the delay, the project will still be developed in collaboration with BP PLC, according to Equinor Canada’s country manager Tore Loseth.

Last summer, Prime Minister Justin Trudeau’s approval of the offshore oil project, initially valued at US$12 billion, was seen as a significant win for the fossil-fuel industry. However, it sparked strong opposition from environmental organizations.

After reevaluating Canada’s oil reserves following Russia’s invasion of Ukraine, the government finally approved the project. The administration saw the project as essential to the country’s future development despite its commitment to cutting emissions.

According to Equinor, once the Bay du Nord project is fully operational, it will be able to produce up to 200,000 barrels of oil per day from its five separate finds. It was supposed to be the first major new crude production site in Canada since Suncor Energy Inc.’s Fort Hills oilsands mine began operations in 2018.