Shell has signed an agreement to purchase a 30% stake in the Bay du Nord oil project operated by Equinor in Newfoundland and Labrador, Canada. This agreement comes as companies are advancing a development worth approximately CAD 14 billion, which is expected to reach a final investment decision in early 2027.
Details of the Bay du Nord Project
Under this agreement, Equinor will retain 70% of the stake and will remain the operator of the deep-water project located nearly 500 kilometers off the coasts of Newfoundland and Labrador in the Flemish Pass basin. The initial development phase includes the Bay du Nord and Cambriol discoveries, with recoverable resources estimated at over 400 million barrels of oil.
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Planning for Production and Investment
This project is designed as a phased subsea development that will be connected to a floating production, storage, and offloading (FPSO) vessel. Water depths in the area range from 600 to 1,170 meters. Philip Matthew, Executive Vice President of Equinor for International Exploration and Production, stated: "We are pleased to welcome Shell as our partner in Bay du Nord. This is a strategic project for Equinor and has a high-quality foundation with the potential to create significant long-term value."
The project is nearing completion of the front-end engineering and design (FEED) stages, with ongoing work focused on capital efficiency, execution planning, and development optimization. Equinor aims to make a final investment decision in early 2027, which will depend on market conditions, regulatory approvals, and internal investment decisions. First oil production is expected in 2031.
The development also includes the potential for future subsea tiebacks from the Capahiden, Harpoon, and Bacalhau discoveries, providing additional production opportunities beyond the initial phase. Financial details related to Shell's proposed purchase have not been disclosed.
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