The head of Canadian operations for oil producer Equinor said on Tuesday he is more optimistic the Norwegian company will proceed with its Bay du Nord offshore project, four months after delaying the project for up to three years due to soaring costs.
“That’s our sentiment now, we really want to make this happen,” Tore Løseth, Equinor’s Canada country head, said in an interview at the World Petroleum Congress in Calgary.
“In many ways I feel more optimistic.”
Bay du Nord, far off the Atlantic coast of Newfoundland and Labrador, would be one of Canada’s biggest oil projects in years. It already has the rare support of Prime Minister Justin Trudeau’s government, which has said Bay du Nord would produce relatively low emissions.
Equinor had planned to produce first oil by the late 2020s, and its 500 million barrels of recoverable reserves could last 20 years.
The last publicly released cost estimate for Bay du Nord was C$16 billion ($11.90 billion) before the decision to postpone it, and Løseth said the estimate privately had grown significantly higher.
“We know we need to reduce the cost quite a bit,” he said.
The International Energy Agency’s head said last week that global oil demand would peak by 2030, leaving some assets at risk of being stranded.
Løseth said he is confident Bay du Nord has a place in the energy mix long-term because of its low emissions.
Equinor is not looking at selling part of its 60% stake in Bay du Nord to lower its costs, Løseth said. BP PLC owns 40%.
Newfoundland Energy Minister Andrew Parsons said Equinor has not made financial requests of the provincial government since putting the project on hold. He too is feeling hopeful.
“We’re feeling probably more optimistic than we have in a while,” Parsons told Reuters, after meeting with Equinor officials on Monday.
He said he based his optimism on the fact that Equinor is still drilling exploration wells offshore. That drilling will help Equinor clarify where it should exactly it should extract oil in Bay du Nord, boosting the project’s economics, Løseth said.
(Reporting by Rod Nickel in Calgary, Alberta; Editing by Lincoln Feast)