Canada and Norway’s oil giant Equinor had reached a tentative accord on Thursday, TheLocal said. Under a new agreement, Norway and Canada to develop a major oil field discovered off Newfoundland.
The easternmost Canadian province’s authorities have agreed with the petroleum company, the former Statoil, to acquire a 10 per cent share in the planned exploration of the oil field in the Bay du Nord, 500 kilometres northeast of capital city Saint John’s. Dwight Ball, premier of Newfoundland and Labrador Province, announced the important news on Thursday. According to Mr Ball, the exploratory work scheduled to begin in 2020, while the first oil production expected in 2025.
Equinor’s predecessor Statoil had announced in 2013 the discovery of oil in the Flemish Pass Basin, almost non-explored geological formation within the Bay du Nord. It took three years for the Norwegian company to confirm that the oil field contained exploitable reserves totalling between 300 million and 600 million barrels.
The field is estimated to contain at least 300 million barrels of oil, lying some 1,200 meters below the ocean’s surface. Plans call for the first deep-water platform in eastern Canada, officials said.
Exploratory work is set to begin in 2020, with the first oil production expected in 2025.
“This framework agreement provides important clarity and stability (for) Equinor and our partner Husky Energy,”
said Unni Fjær, vice president of Equinor’s Canadian subsidiary.
According to official estimates, the Bay du Nord project will cost around $5.2 billion.