Equinor touts lower-carbon strategy as it inches closer to launching Bay du Nord project
Equinor 'committed to moving forward' with plan to make Bay du Nord Canada's lowest-emitting oil project
Norwegian energy giant Equinor is sending some strong signals that it plans to move ahead with the on-again, off-again Bay du Nord development in Newfoundland and Labrador's offshore, with ambitions to make it Canada's lowest-emitting oil project.
The latest sign of progress came last week, with the man in charge of the company's international exploration and production sector making his way to St. John's, and mingling with industry leaders in the provincial capital.
In his only media interview during the visit, Al Cook gave a timeline as to how the rebooted — and vastly bigger — oil project might be developed.
Cook said design work is ongoing, to expect a final investment decision within the next two years, and first oil by about 2028.
The fact that we're here and we're working forward on it I think is a really strong signal we intend to develop this project. We are committed to moving it forward.- Al Cook, Equinor
"The fact that we're here and we're working forward on it I think is a really strong signal we intend to develop this project. We are committed to moving it forward," he told CBC News during an interview at the company's offices in downtown St. John's.
Cook made his way to St. John's after attending the COP26 United Nations climate summit in Scotland, where delegates debated ways to take action against climate change and reduce greenhouse gases, including those emitted by the oil and gas industry.
But instead of keeping a low profile about Equinor's ambition to establish N.L.'s fifth producing oil field, Cook was speaking boastfully about how Bay du Nord can help both Canada and Equinor — Norway's largest energy company — achieve the goal of net-zero emissions by 2050.
Cook said Equinor's goal is to make Bay du Nord the lowest-emitting oil project in Canada.
"If we can live up to that aspiration, I think we can clearly say that for as long as the world needs oil and gas, developments such as Bay du Nord will be key to doing that — to meeting that need in the lowest carbon way possible," he said.
"One day the world will no longer need fossil fuels. But until that day, we believe it's vitally important that we focus on how that oil and gas is developed. Namely, with the lowest emissions possible."
Just over three years ago, Bay du Nord appeared to be on an unstoppable path, with a development agreement announced in St. John's with Equinor promising to open a new frontier in the province's oil and gas industry.
But the global pandemic sent shock waves throughout the industry, and Equinor announced nearly 20 months ago that it was deferring the project in order to make it more viable in the face of then-collapsing oil prices.
'Breakthrough' oil discoveries
The Bay du Nord business case changed late last year, however, after Equinor announced that an exploration campaign had uncovered two more oil discoveries in the area that Cook described as a "breakthrough" for Bay du Nord.
"Those are the ones that gave us sufficient volumes to say we believe we can have the potential to move this project forward," he said.
Bay du Nord was discovered in 2013, and has now grown to six different discoveries within close proximity, allowing for a scenario that would involve a single floating production, storage and offloading vessel known as an FPSO, connected by subsea infrastructure to the various fields.
There have been reports by industry publications that the amount of recoverable oil in the area has grown to one billion barrels, up from earlier estimates of 300 million, requiring a vessel capable of producing 200,000 barrels per day, much larger than the original scheme.
Cook downplayed those higher estimates, saying that those new discoveries are still being appraised. However, he's hopeful that another exploration campaign planned for next year — a two-well campaign using the West Hercules drill rig — will once again be successful, and hinted that those high-end estimates may become reality.
"I'm not here saying we're definitely going to discover more, but we do believe we have the potential to add to the volumes, and it's that that gives us some excitement about the future of the project," he said.
In the meantime, Equinor and its partners are designing a project that can operate safely and profitably in a harsh environment located at the outer extremes of the helicopter and supply ship fleets that serve the offshore.
Legacy fields such as Hibernia are located in the Jeanne d'Arc Basin, some 315 kilometres from St. John's, in water depths of less than 100 metres. Bay du Nord is located in of 1,200 metres, some 500 kilometres offshore in what's referred to as a frontier basin.
As such, designers plan to depend heavily on digitization in order to limit the number of personnel on board the FPSO.
"For me this is an opportunity to start putting some of the words from Glasgow into action in St. John's. And that's what makes me excited. A belief that this can be a project that really takes this in the right direction," said Cook.