Equinor unveils drilling program for 200,000 b/d Bay du Nord Canadian oil project

Equinor Canada is firming up plans for an exploration drilling program in the summer of 2024 for its proposed Bay du Nord oil project offshore Newfoundland and Labrador, the company's spokesperson Alex Collins said Aug. 14.

A contract has been awarded for the Hercules semi-submersible drilling rig to conduct an exploration drilling program, Collins said in an emailed announcement, adding that the rig is owned by SFL Corp. and managed by Odfjell Drilling.

The program, which will focus on the Sitka prospect, includes an option for an additional well, both located in the Flemish Pass Basin, she said.

The exploration program, anticipated to begin operations in the second quarter of 2024, will support Equinor's continued optimization of the Bay du Nord's project development, Collins said.

The Hercules is a sixth-generation deepwater semi-submersible drilling rig capable of operations in water depths of nearly 3,000 meters. Its robust hull design makes it capable of operating in the harsh winters and high winds offshore Eastern Canada, she said, noting this will be Equinor's third campaign with the current mobile offshore drilling unit.

In late May, Equinor Canada said in a statement that it was pushing back its planned development of the 200,000 b/d-Bay du Nord project to up to three years, citing "improved project robustness in the face of challenging market conditions" as the key reason.

"We will utilize this postponement to actively mature Bay du Nord toward a successful development," the statement said, citing Tore Loseth, the country manager for Equinor Canada.

In recent months, due in large part to volatile market conditions, the Bay du Nord project has experienced significant cost increases in many aspects of the development, the statement said without giving a figure.

Located 320 miles northeast of St. John's in the Flemish Pass Basin and in water depths of about 1,170 meters, Bay du Nord is planned to be Canada's first deep-water project, Paul Barnes, director of Atlantic Canada and Arctic for the Canadian Association of Petroleum Producers told S&P Global Commodity Insights separately. Today's announcement is a reiteration of Equinor's intent to develop that mega project, he added.

At the center of the planned remote development will be a floating, production, storage and offloading facility with the acreage estimated to hold 300 million barrels of crude oil, Barnes said.

"Equinor has already carried out multiple exploratory drilling programs at various prospects that will support the Bay du Nord project, and Sikta will be another prospect where they target to share up additional resources," Barnes said.

Terra Nova FPSO moving to site

Meanwhile, the floating production, storage and offloading vessel serving the Terra Nova -- another offshore oil field in Newfoundland -- is being "hauled to its site as we speak," after carrying out extensive repairs and overhaul activities to expand its lifespan, Barnes said.

" ... the field (is expected) to return to production late this year," he said.

The Terra Nova field was expected to restart production in March 2023 after an extensive overhaul of the FPSO that was carried out at a marine facility in Spain and at the Bull Arm marine yard in Newfoundland, Barnes said.

The offshore field -- located 320 km (200 miles) southeast of St. John's in the Grand Banks area -- could potentially lead to a rise in production to about 30,000 b/d from the start-up, Barnes said, noting that the output from Terra Nova has been shut since 2019.

No comments were immediately available from Terra Nova's operator Suncor Energy. However, the Suncor Vice President for the East Coast Brent Miller said at the Energy NL Conference & Exhibition 2023 in St. John's late May that quayside work was underway at Bull Arm for the FPSO, adding that the next steps would be a reconnection to the production platform and first oil followed by a ramp up.

There are currently four main oil fields, Hibernia, Hebron, Terra Nova and White Rose, accounting for all of the province's total offshore oil production of 204,445 b/d, the Canada-Newfoundland and Labrador Offshore Petroleum Board had said in its latest update July 26.