Shell Canada Energy, a subsidiary of the British energy giant Shell, has signed an agreement with the Norwegian company Equinor to purchase a 30% non-operating stake in the Bay du Nord oil project located off the coast of Newfoundland and Labrador.
Details of the Bay du Nord Project
Equinor retains a 70% stake in this project and will continue to operate the project in the Flemish Pass area, which is approximately 500 kilometers from the shores of Newfoundland and Labrador. The water depth in this area ranges from 600 to 1,170 meters.
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This deal helps mature the project, and the final investment decision (FID) is expected to be made in early 2027, subject to market conditions, regulatory approvals, and internal company processes.
Investment and Production Potential
Shell has stated that this deal creates an attractive entry point for them and is expected to yield returns higher than their anticipated rate. The Bay du Nord project is designed as a phased subsea development connected to a floating production, storage, and offloading (FPSO) unit. The gross production capacity of this project is planned to be between 160,000 to 175,000 barrels of oil equivalent per day (kboe/d), with recoverable resources in the initial phase including over 400 million barrels of oil.
Equinor has announced that the Bay du Nord project is finalizing its front-end engineering and design (FEED) and is focused on ongoing work to improve capital efficiency, execution planning, and overall project robustness.
The planned investment for this project is estimated at around CAD 14 billion (USD 9.87 billion), and first oil is expected to be produced in 2031.
Philippe Mathieu, Executive Vice President of International Exploration and Production at Equinor, said: "We are pleased to welcome Shell as our new partner in the Bay du Nord project. This is a strategic project for Equinor that has high-quality resources and the potential to create significant long-term value. Shell's entry into this project strengthens it as it moves toward the final investment decision."
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