Equinor inching closer to sanctioning 'world class' Bay du Nord field
Company hopes to green-light decision in spring 2021, says manager
An official with Equinor says the company's goal of becoming a producing operator in Newfoundland's offshore "has not wavered," with efforts to develop the much-hyped and "world class" Bay du Nord field at a critical stage.
The Norwegian company and its Canadian partner, Husky Energy, want to open the Flemish Pass to oil production, and are working hard to overcome the challenge of doing so in a safe and cost-effective way, Jim Beresford said Thursday.
"We're still at an early stage with big decisions ahead of us," Beresford told a gathering of oil insiders at a conference in St. John's.
But based on the update provided by Beresford, Equinor is pulling out all the stops to make sure it can access the estimated 300 million barrels of oil and establish the province's fifth producing oil field.
The company is actively engaging with international contractors to ensure its cost and execution schedule is locked down solid, and could award a critical engineering and design contract by as early as next spring.
Testing of a ship-shaped production vessel similar to the ones used in the Terra Nova and White Rose oil fields was successfully tested, and as many as eight delineation wells have been carried out since the Bay du Nord, Bay de Verde and Baccalieu discoveries were made in 2013.
The team working on Bay du Nord has to convince Equinor and its partners the project is viable, and Beresford is confident that can be done ahead of a possible sanctioning date of April 2021, with first-oil scheduled to late 2025.
"We've operated in the Flemish Pass for over a decade now, so we know what it takes. It's more a matter of putting together a good commercial business case to see if we can make Bay du Nord a viable project," he later told reporters.
Bay du Nord poses some significant challenges because it's located 450 kilometres east of St. John's, in water depths reaching 1,200 metres.
The oil-rich and mature Jeanne d'Arc Basin is some 340 kilometres from St. John's, with water depths of roughly 100 metres.
Minimum personnel on board
But the move to much deeper water, in a frontier basin, is being viewed not only as a challenge, but an opportunity, said Beresford.
"It's energizing and it's motivating and I think we've got the right people in this community and this industry to actually move this forward. So I think it will be a bit of a legacy for Newfoundland and Labrador to actually have this project move ahead and do it successfully and safely," he said.
The plan is to use digital technology to reduce the number on personnel onboard the production vessel, which will be connected to a shore-based control room via fibre optic cable.
This will reduce the cost of transporting workers to and from the vessel, and create other efficiencies, Beresford explained, but "Bay du Nord will always have personnel on board to manage the processing and the marine nature of the vessel."
He said the vessel, known as an FPSO, will also be designed for low maintenance, without sacrificing safety.
Once a funding decision is made, further planning and construction is expected to take four-and-a-half years.
Beresford said the plan is to have the ship's hull and detachable turret built internationally, with local opportunities to construct the topsides and subsea components.
Under the terms of a development agreement with the provincial government, 5,000 metric tonnes of fabrication must take place in Newfoundland and Labrador, with an estimated $3.5 billion in provincial revenues over the 20-year life of the field.