The plot thickens for controversial Bay du Nord oil project despite govt approval

Norwegian state-controlled oil and gas giant Equinor is now facing more challenges related to the development of its controversial Bay du Nord offshore oil project located in Canada despite recent approval by the government. The latest challenge involves a lawsuit filed by environmentalists, aiming to overturn the approval.

Equinor has been making plans to develop its Bay du Nord project located in the Flemish Pass, approximately 500 kilometres east of St. John’s, Newfoundland and Labrador, in the Atlantic Ocean via an FPSO vessel, suitable for tie-back of adjacent discoveries and future prospects. Canada’s Cenovus Energy is Equinor’s partner in the project. If developed, the Bay du Nord would be in operation for 30 years.

As previously reported, the government’s approval of the project, necessary for it to move forward, experienced delays amid pressures from environmentalist groups. The plot thickened further following the beginning of the war in Ukraine, which brought the growing need for the security of energy supply to the limelight and put the Canadian government between a rock and a hard place while it was working to make the decision.

Following several delays, the project was finally approved by the Canadian government in early April 2022. The government claimed that Bay du Nord would be among the lowest carbon per barrel of oil in the world, meeting the current global demand “at this important time of transition.”

The approval, which came only days after the Intergovernmental Panel on Climate Change (IPCC) published a report saying that no more fossil fuel projects can go ahead if we are to meet climate targets, caused outrage among the environmentalist groups and they vowed to work tirelessly “to ensure the project does not proceed.” This pledge has now materialised in the form of more protests and a lawsuit.

Namely, activists in Stavanger, Norway and St. John’s, Canada this week staged protests against the Bay du Nord oil project. As part of their protests, video projections appeared on buildings and other local landmarks in Stavanger on the eve of Equinor’s Annual General Meeting. The videos featured testimony from Canadians opposing the proposed oil project, highlighting the risks to marine habitats and the climate.

Equinor held its Annual General Meeting on 11 May 2022 in Stavanger. Among other things, Equinor’s first energy transition plan was put up for an advisory vote and endorsed by shareholders. In the plan, the Norwegian company provided an overview of how it is progressing towards its 2050 net-zero ambition through short-term actions and medium-term ambitions.

Gretchen Fitzgerald, the National Programs Director for Sierra Club Canada Foundation, was in Norway and spoke directly to Equinor shareholders and leadership about Canadians’ concerns with the Bay du Nord project, calling for its cancellation and investments into wind and solar projects.

“Equinor’s Bay du Nord flies in the face of climate science and would be a clear violation of our attempts to meet climate targets. Bay du Nord’s oil would generate over 30 million tonnes of carbon pollution a year,” Fitzgerald said.

Yvonne Earle, contact person for the Avalon Chapter of the Council of Canadians in Newfoundland and Labrador, said: “The touted “clean oil” at Bay du Nord burns just as lethally for the planet’s survival and will make meeting Canada’s reduced emissions promises impossible.”

As part of their efforts to stop the project, Canadian environmental groups are launching a lawsuit to overturn the federal government’s approval of Bay du Nord. Ecojustice, on behalf of Équiterre and Sierra Club Canada Foundation, filed the lawsuit in the Federal Court. The groups say the project’s approval clashes with Canada’s international obligations and the urgent call to reduce global emissions as the reality of the climate emergency becomes more distressing with every severe weather event.

Colleen Thorpe, Executive Director, Équiterre, stated: “The Canadian government is attempting to greenwash Bay du Nord by touting its potential use of Carbon Capture and Storage (CCS) – but no amount of greenwashing can hide the fact that the massive amount of oil generated by the project will not be offset and will damage our climate.”

Offshore Energy has reached out to Equinor, seeking comment on the latest developments and the launch of the lawsuit. A spokesperson for Equinor told us the company has followed all regulatory requirements for offshore field developments in Canada and is “pleased with the environmental assessment approval and the broad support the Bay du Nord project has received locally.”

When it comes to the criticism by environmental groups, the spokesperson said: “Equinor appreciates that there are differing views in the energy debate – something we experience in Norway and everywhere we have activity. Our focus is on the collaborative effort with partners and local authorities to mature the project towards an investment decision. We believe that this can be an important project with high-value creation, a low carbon footprint and strong economic value for the region.”

Equinor is now working to mature the project and a final investment decision is expected in the next couple of years while the first oil could be achieved as early as late-2028, the Norwegian company recently told Offshore Energy. It is worth reminding that the FID was previously expected in 2021 and the first oil in 2025.

Equinor is also conducting an exploration drilling campaign in waters offshore Canada, using the West Hercules semi-submersible rig. The exploration wells are planned to be drilled at the Cambriol Central and Sitka prospects. If successful, the two new wells could add to the Bay du Nord development. The rig is expected to complete its contract with Equinor in October this year.

Previous estimates for the Bay du Nord project pointed to recoverable reserves of about 300 million barrels, but this does not account for the two new oil discoveries made during the 2020 campaign, which provide an upside to previous estimates.

[The article continues below videos]

Gretchen Fitzgerald was invited to present before Equinor shareholders by Martin Norman of the Australasian Centre for Corporate Responsibility and Ragnhild Waagaard of WWF-Norway.

Meanwhile, Equinor is also working to develop its Rosebank project located West of Shetland. Ithaca Energy, owned by Israeli Delek Group, has recently revealed it is taking over Siccar Point Energy, one of the partners in the Equinor-operated Rosebank project as well as the controversial Cambo project in the UK. Ithaca has also revealed that a Final Investment Decision for both of these fields is expected next year.

[The article has been updated with a statement from Equinor and a video of Gretchen Fitzgerald’s presentation at Equinor’s AGM]