$200M deal struck to advance Bay du Nord oil project

Key Takeaways:

• Newfoundland and Labrador has struck a deal with Equinor and BP on the Bay du Nord deepwater oil project that could bring up to $6.4 billion in direct provincial revenue during its first phase, marking the region’s first new standalone offshore development since Hebron.
• The agreement includes major local employment commitments, with at least 95% of subsea components to be fabricated in the province, a $200 million fabrication fund to support a new floating dry dock at Bull Arm, and over 31 million person-hours of work expected across the project’s 25-year lifespan.
• Bay du Nord, which holds an estimated 430 million barrels of recoverable resources about 500 kilometres offshore, is targeting a final investment decision in 2026 and first oil in 2031, with the new agreement giving Equinor and BP the confidence to move the project forward after it was paused in 2023.

The Whole Story:

Newfoundland and Labrador has reached a major agreement with Equinor and BP on the Bay du Nord offshore oil and gas project, securing life-of-field benefits, royalties, and an equity option that will deliver up to $6.4 billion in direct revenue during the first phase of development.

The agreement marks the province’s first new standalone offshore oil and gas development since Hebron and its first deepwater project. It comes after Equinor paused the project in 2023 for up to three years.

For the construction and trades sector, the deal includes significant commitments: a minimum of 95% of subsea components will be fabricated in Newfoundland and Labrador, and $200 million in fabrication funds will support long-term trades jobs. The province plans to use this funding to build a large floating dry dock at Bull Arm, weighing approximately 7,000 to 8,000 tonnes.

The agreement includes targets for skilled trades apprentices—10% for construction and 15% for onshore operations—and commits to a minimum of 1.9 million person-hours of professional work in project management, procurement, and engineering. Over the project’s 25-year life, the development is expected to generate over 31 million person-hours of work.

“This project makes Newfoundlanders and Labradorians the primary beneficiaries of our own resources,” Premier Tony Wakeham said in a statement. “It guarantees new trades jobs for the entire duration of the project along with billions of dollars in new revenue for services here at home.”

The agreement also includes a $100 million contribution to research and development. Expressions of interest have been issued for construction work in the province, including topsides components.

“This agreement marks an important step forward for Bay du Nord,” said Tore Løseth, Country President of Equinor Canada, on behalf of the Bay du Nord partnership. “It gives us the clarity and confidence to continue moving the project towards a potential final investment decision next year.”

Bay du Nord, discovered in 2013, has estimated recoverable resources of nearly 430 million barrels. The development is located approximately 500 kilometres offshore in the Flemish Pass Basin in water depths of about 1,200 metres. Project sanction is targeted for 2027, with first oil expected in 2031.