For the first time in a while, oil industry players are feeling good about the prospects for the development of the Bay du Nord project – the deep water oilfield off Newfoundland put on hold by Equuinor nearly three years ago.
Premier Tony Wakeham says they are close to a benefits agreement, but just what that means is not clear.
Offshore oil industry consultant Rob Strong says the oil platform would be comprised of about 16 modules, so a benefits agreement is highly complex. Premier Wakeham has demanded that the majority of the work be done in Newfoundland and Labrador.
Strong told VOCM Open Line host Brian Callahan that Decision Gate 2 on the project would also include a financial investment component on the $14-billion project.
Bay du Nord has not made it on Ottawa’s “Major Projects” list, but Strong says the federal government has several avenues to support the oil development; including offering a break on royalties and taxes.
“They can also do something on the Law of the Sea Convention and pay those royalties to the United Nations of between 2 and 7 per cent because it has to be paid. But the statement from Equinor’s vice-president that ‘big money is coming’ grabbed my attention,” says Strong.
