Shell has announced its plan to buy a 30% stake in Equinor's Bay du Nord offshore oil project in Canada. This project, estimated to cost C$14 billion, is moving closer to a final investment decision expected in early 2027.
As part of the agreement revealed on Friday, Equinor will retain control with a 70% stake and continue to operate the project. Bay du Nord is located about 500 kilometers off the coast of Newfoundland and Labrador in the Flemish Pass Basin. The financial details of the deal were not shared.
Shell's involvement comes three months after Equinor acquired BP's share in Bay du Nord, giving it full control of the project while looking for a new partner for development.
Philippe Mathieu, Equinor's executive vice president for Exploration and Production International, expressed enthusiasm about Shell joining the project, describing it as strategic, with high-quality resources that could deliver significant long-term value.
He added, "Shell's involvement strengthens the project as we advance toward a final investment decision."
Bay du Nord is among Canada’s largest untapped offshore oil projects, with more than 400 million barrels of recoverable resources expected in its initial phase.
The development will involve a floating production, storage, and offloading vessel (FPSO) linked to underwater wells in water depths ranging from 600 to 1,170 meters. The first phase will include the Bay du Nord and Cambriol discoveries, with potential future connections to the Cappahayden, Harpoon, and Baccalieu fields.
The Canadian government anticipates that the project could produce between 160,000 to 175,000 barrels per day, with the first oil expected to flow in 2031.
Equinor has stated that front-end engineering and design work is close to completion, focusing on cost control and refining execution plans to prepare for the investment decision.
The project received federal environmental approval back in 2022. Earlier this year, Equinor reached an agreement with the Newfoundland and Labrador government to help move the development forward and enhance its commercial prospects.
Both Equinor and Shell plan to work towards a final investment decision in early 2027, depending on market conditions, regulatory approvals, and their internal investment processes.