The Provincial Government has reached a major milestone for Newfoundland and Labrador’s offshore industry to advance the Bay du Nord project. Agreements on life-of-field benefits, royalties, and an equity option have been reached with partners Equinor and BP. This is the province’s first new standalone offshore oil and gas development since Hebron and its first deepwater project.

In 2023, Equinor paused the project for up to three years. With today’s agreement, the Provincial Government has secured a path forward that delivers long‑term value, strengthens local employment, and ensures benefits remain in Newfoundland and Labrador throughout the entire life of the project. It puts Newfoundland and Labrador back on the map for global oil and gas investment.

The agreement exceeds what was negotiated in 2018 and will provide up to $6.4 billion in direct revenue to the Provincial Government in the first phase of the project.

This project is the first life-of-field benefits agreement for an oil and gas project, which ensures a focus on benefits throughout the life of the project and not just during development. This will result in over 31 million person-hours of work over 25 years.

Expressions of interest have been issued for construction work in Newfoundland and Labrador, including topsides components – an important step to ensuring local resources and expertise are fully utilized.

The agreement represents a commitment to fabricate a minimum of 95 per cent of the subsea components in Newfoundland and Labrador. An equity option gives the Provincial Government a seat at the table and a piece of future growth.

For the first time, the agreement includes targets for the employment of skilled trades apprentices – 10 per cent for construction and 15 per cent for onshore operations.

A key part of the agreement is $200 million in fabrication funds, which will facilitate long-term fabrication trades jobs in the province, intended to expand the province’s capacity for offshore and maritime fabrication and maintenance. The Provincial Government plans to use this funding to secure capital to build a large floating dry dock at Bull Arm. The floating dry dock will weigh approximately 7,000 to 8,000 tonnes.

Other significant benefits commitments include a $100 million contribution to research and development and a commitment of a minimum of 1.9 million person-hours of professional work in project management, procurement management, and engineering.

This government will continue working closely with Equinor, BP, industry partners, and community stakeholders as the project advances toward sanction.

Bay du Nord, discovered in 2013, has estimated recoverable resources of nearly 430 million barrels. Project sanction is targeted for 2027, with first oil expected in 2031. The development is located approximately 500 kilometres offshore in the Flemish Pass Basin in water depths of about 1,200 metres.

Quotes
“Newfoundland and Labrador is officially back in the oil and gas business. This project makes Newfoundlanders and Labradorians the primary beneficiaries of our own resources. It guarantees new trades jobs for the entire duration of the project along with billions of dollars in new revenue for services here at home. And with the new floating dry dock we are breaking the boom-bust cycle of previous mega-projects and creating long-term and lasting building trades jobs in a brand-new maintenance and repair sector.”
Honourable Tony Wakeham
Premier of Newfoundland and Labrador

“We believe in responsible offshore development because it delivers jobs, strengthens communities, and drives economic growth. Our government was committed to ensuring we secured guaranteed benefits across the entire project for the life of the project. This ensures sustainable work for our tradespeople and royalty revenue to benefit everyone in our province. Our focus remains on maximizing long‑term benefits for the people of Newfoundland and Labrador.”
Honourable Lloyd Parrott
Minister of Energy and Mines

“This agreement marks an important step forward for Bay du Nord. It reflects a strong partnership with the Government of Newfoundland and Labrador in ensuring the project delivers real, long-term benefits for the people of this province. This agreement gives us the clarity and confidence to continue moving the project towards a potential final investment decision next year.”
Tore Løseth
Country President, Equinor Canada, on behalf of the Bay du Nord partnership

“Bay du Nord is exactly the kind of project our new government is proud to support as we build Canada stronger. It will be one of the cleanest oil projects in Canada, it will mean thousands of good jobs for the skilled workers of Newfoundland and Labrador who will get the job done, and it is a major economic opportunity for Canada.”
Honourable Joanne Thompson
Minister of Fisheries
Government of Canada

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Premier Wakeham’s speaking notes can be found here. Please check against delivery.

Livestream

BACKGROUNDER

Key Benefits of the Agreement

Royalties and Taxes

• Up to $6.4 billion in direct revenue to the Provincial Government in the first phase of the project.
• First offshore development under the Generic Oil Royalty Regulations (GORR).

Life-of-Field Benefits

• This project is the first life-of-field oil and gas benefits agreement, which ensures a focus on benefits throughout the life of the project and not just during development. This will result in over 31 million person-hours of work over 25 years.

Equity Option

• Option for up to 10 per cent provincial equity ownership in the Bay du Nord project.

Employment

• Minimum of three million hours in fabrication employment.
• Minimum of 1.9 million hours of professional work.
• 3.4 million hours employment in drilling and completions.
• 23 million hours in operations (direct).
• 55 million hours operations (direct and indirect).
• For the first time, targets for the employment of skilled trades apprentices – 10 per cent for construction and 15 per cent for onshore operations.

Fabrication

• Substantially all, but no less than 95 per cent of subsea fabrication to be completed in the province.
• FPSO mooring.
• FPSO carryover work.

Capacity Building

• $200 million fabrication fund to be leveraged toward the fabrication of a large-scale (7,000-8,000 tonnes) floating dry dock in Bull Arm to expand our capacity for marine fabrication and maintenance.

Integrated Operations Centre

• Local onshore management of offshore operations.
• 100 positions.

Procurement Opportunities

• In accordance with the Atlantic Accord Acts, the project’s contracting and procurement strategy will give first consideration to goods and services provided from within Newfoundland and Labrador, where competitive in competence, price, quality, and delivery.

Innovation, Skills, and R&D

• $100 million investment in research and development to advance the province’s global capacity for innovation in areas such as additive manufacturing, artificial intelligence, marine technologies, autonomous systems and robotics.

Diversity and Inclusion

• A comprehensive Gender Equity, Diversity and Inclusion Plan to support the participation of underrepresented groups in the project.