Canada and Norway’s Equinor reach accord on big offshore oil find

Authorities in Canada's easternmost province said Thursday they had reached a tentative agreement with Norwegian oil giant Equinor to develop a major oil field discovered off Newfoundland in the North Atlantic.

Canada and Norway's Equinor reach accord on big offshore oil find
A file photo of a Norwegian oil platform. Photo: Tore Meek / NTB scanpix

The province has agreed with the petroleum company, the former Statoil, to acquire a 10 percent share in the planned exploration of the oil field in the Bay du Nord, 500 kilometers (300 miles) northeast of capital city Saint John's, said Dwight Ball, premier of Newfoundland and Labrador Province.

The field is estimated to contain at least 300 million barrels of oil, lying some 1,200 meters (3,900 feet) below the ocean's surface. Plans call for the first deep-water platform in eastern Canada, officials said.

Exploratory work is set to begin in 2020, with the first oil production expected in 2025.

“This framework agreement provides important clarity and stability (for) Equinor and our partner Husky Energy,” said Unni Fjær, vice president of Equinor's Canadian subsidiary.

According to official estimates, the Bay du Nord project will cost Can$6.8 billion ($5.2 billion) while generating some Can$3.5 billion in revenues for Newfoundland, through taxes and royalties.

Statoil, Equinor's predecessor, had announced in 2013 the discovery of oil in the Flemish Pass Basin, a relatively little-explored geological formation within the Bay du Nord.

Three years later the Norwegian company announced that the oil field contained exploitable reserves totalling between 300 million and 600 million barrels.

READ ALSO: The longstanding dispute between Canada and Denmark – and how the unlikely foes will try to settle it 


Norwegian oil company doubles revenue as gas prices surge  

Norwegian energy giant Equinor said Wednesday that soaring gas prices helped it more than double its revenue in the third quarter. 

A file photo showing a North Sea oil rig. Norway's state-owned oil company Equinor netted a pre-tax operating result of 9.77 billion dollars for the third quarter of 2021.
A file photo showing a North Sea oil rig. Norway's state-owned oil company Equinor netted a pre-tax operating result of 9.77 billion dollars for the third quarter of 2021. Photo: ANDY BUCHANAN / AFP

Equinor, which is 67 percent owned by the Norwegian state, said that its net profit rose to $1.4 billion between July to September this year, compared to a loss during the same period in 2020, partly due to asset write-downs.

But the profit figure was well below analyst expectations of $2 billion.

However, total revenue hit $23 billion, narrowly beating expectations of $22 billion, according to analysts surveyed by Factset.

The number was also more than twice the revenue of the same period last year, when many businesses were devastated by the Covid-19 pandemic.

Equinor’s preferred indicator — net operating profit, which excludes some one-off items, came in well above expectations at $9.8 billion.

Energy prices have surged recently as the global economy recovers from the pandemic, and the northern hemisphere heads towards winter.

Chief executive Anders Opedal said that “the global economy is in recovery, but we are still prepared for volatility related to the impact of the pandemic”.

“The current unprecedented level and volatility in European gas prices underlines the uncertainty in the market,” he said in the statement.

“Equinor has an important role as a reliable energy provider to Europe and we have taken steps to increase our gas exports to respond to the high demand.”

Equinor’s average price of oil per barrel reached $69.2 in the third quarter — up from $38.3 a year earlier.

Still largely oil-based, the company said in June it plans to invest $23 billion in renewable energy by 2026.

READ ALSO: Norway oil giant Equinor aims to be carbon neutral by 2050