BP Sells Interest in Bay du Nord Project to Equinor Amid Strategic Portfolio Shift

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BP has sold its stake in the Bay du Nord oil project offshore Newfoundland and Labrador to Equinor, aiming to streamline its portfolio. Equinor plans to make a final investment decision by early next year, with the project estimated to cost $14 billion and targeted to produce first oil by 2031.

LONDON, U.K. — BP has announced its decision to divest its interest in the Bay du Nord oil project located offshore Newfoundland and Labrador, transferring its stake to Equinor, the Norwegian company managing the project. This move aligns with BP's strategy to simplify its global portfolio and focus on more lucrative opportunities. The financial details of the transaction remain undisclosed.
Gordon Birrell, BP's executive vice-president of upstream operations, expressed pride in the collaborative efforts with Equinor to advance the Bay du Nord project. However, he emphasized BP's commitment to stringent capital discipline, channeling investments only into ventures that provide the highest value to the company.
The Bay du Nord project is situated in the Flemish Pass Basin, approximately 500 kilometers east of St. John’s, at water depths reaching up to 1,170 meters. BP has held interests in ten licenses linked to this initiative, averaging a 37.2 percent working interest. The sale is contingent upon standard conditions and approvals, with BP retaining full ownership of two exploration licenses in the same offshore area.
Equinor, which is primarily owned by the Norwegian government, is expected to make a final investment decision regarding the Bay du Nord project in early 2027, contingent on market conditions and necessary regulatory and internal approvals. Philippe Mathieu, Equinor's executive vice-president for international exploration and production, stated that they have enhanced the project's viability by mitigating key risks over recent years. He described the transaction as a testament to Equinor's confidence in the project's future and indicated plans to invite additional partners for its development.
The project is anticipated to yield recoverable resources exceeding 400 million barrels of oil in its initial phase, with an estimated development cost of $14 billion. Equinor aims to commence oil production by 2031.
The provincial government of Newfoundland and Labrador has high expectations for Equinor's advancement of the Bay du Nord project. There are ongoing discussions regarding the potential acquisition of a stake in the project by the provincial government, with a decision expected later this year. Premier Tony Wakeham lauded the news as a positive development for both the Bay du Nord project and the province's offshore energy sector. He interpreted Equinor's full ownership as a strong endorsement of the project's prospects and the long-term viability of the region's offshore resources.
The provincial government has projected that the Bay du Nord project could generate approximately $6.4 billion in royalties and taxes, along with a 10 percent equity share during its initial 25 years. If the provincial equity stake is not realized, officials estimate revenues would still reach around $5 billion.
Conversely, the Sierra Club has criticized BP's exit from the project, suggesting it indicates the Bay du Nord initiative lacks viability and urging a shift towards community-centered renewable energy solutions, such as offshore wind infrastructure, for Newfoundland and Labrador.

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