“The sun is shining on our offshore, because cannot will be no more.” -Premier Tony Wakeham
Thousands of jobs are going to be created as Newfoundland and Labrador, Equinor and BP have reached an agreement on the development of Bay du Nord in the Flemish Pass Basin about 500km off St. John’s.
Estimates are that the field, discovered 13 years ago, contains just over 400-million barrels of oil. But insiders expect that estimate to grow over the years.
Equinor paused the project almost three years ago, but agreements have now been reached on life-of-field benefits, royalties, and an equity option. It means up to $6.4-billion in revenue for the provincial government in the first phase of the project.
It’s the province’s first stand-alone offshore oil and gas development since Hebron .
The agreement represents a commitment to fabricate a minimum of 95 per cent of all subsea work. A key part of the agreement is $200-million in fabrication funds. That money will be used to build a large floating drydock at Bull Arm, a structure which will weigh 7,000 to 8,000 tonnes.
The Government of Newfoundland and Labrador will now cancel the MOU on Bull Arm, and own and maintain the site itself.
Premier Wakeham says that will be a new industry for Newfoundland and Labrador.
“The pent up national and global demand for drydock services is real. The wait time for commercial drydock work in Canada is between 12 and 24 months and for Coast Guard and naval vessels between 24 and 48 months.
The federal government is also playing a role, waiving about a billion dollars in taxes, most of which would have been levied through the Law of the Sea Treaty, which applies to international waters.
He praised Prime Minister Mark Carney for doing his utmost to get the project going, saying the province is back in the oil and gas business.
He says the next stage of the journey will be to designate Bay du Nord as a project of national significance, and send a message to the world that Canada is truly back as an oil and gas superpower.
The oil companies will establish headquarters in metro, with about 100 positions.
