Norwegian Company Delays Offshore Oil Project Near Newfoundland for 3 Years

Norwegian energy company Equinor's flag is seen at its headquarters in Stavanger, Norway, on Dec. 5, 2019. (Ints Kalnins/File Photo/Reuters)

The Norwegian global oil company Equinor has announced it will be postponing an offshore oil project near the coast of Newfoundland & Labrador for at least three years because of rising costs.

Equinor’s Bay du Nord oil project consists of several oil discoveries in the Flemish Pass basin, located in international waters about 500 kilometres northeast of St. John’s, N.L.

The company first discovered oil at the site in 2013, followed by several more findings in the last few years, and has been working toward installing offshore oil-drilling sites in the area ever since. It previously planned to produce its first Bay du Nord oil by the end of the decade. The company also has 500 million barrels of recoverable reserves that could last 20 years.

However, on May 31 Equinor announced it had decided to postpone the project because of rising costs in recent months, which it attributed to “volatile market conditions.”

“Bay du Nord is an important project for Equinor. Within the context of the changing market with increased cost, we will now look at the project again to see if we can do further optimizations to our concept and strategies,” Equinor’s Senior Vice President Trond Bokn said in a statement.

The Canadian government gave Bay du Nord environmental approval in April 2022, while the company and its partners had still not confirmed the full investment needed to carry out the project.

Shortly after the postponement was announced, N.L. Premier Andrew Furey expressed his disappointment, but noted that Equinor told him it was just a delay, and the project is not cancelled.

“The company has assured me that this is largely market forces at play and it’s not a cancellation,” Furey said.

Federal Labour Minister Seamus O'Regan used a different tone when commenting on the postponement, calling it “sadistic” timing by Equinor as the announcement came on the same day as an Energy N.L. industry conference in St. John’s.

“In my mind, the timing is nothing short of sadistic,” O'Regan said on June 2, according to CBC News. “I don’t know what they were thinking.”

The Epoch Times contacted Natural Resources Canada for comment on the matter, but did not hear back immediately.

The Canadian Press and Reuters contributed to this report.