Newfoundland and Labrador has signed an agreement with Equinor and BP that moves Bay du Nord toward construction and production, reviving a project Premier Tony Wakeham framed as a return to active offshore oil and gas expansion after years of delay.
The project carries a stated potential $14 billion investment by Equinor and BP and targets an estimated 400 million barrels of oil in the opening phase in the Flemish Pass Basin.
The agreement is the key commercial and policy milestone ahead of a final investment decision scheduled for 2027, with first oil targeted for 2031. Wakeham said projects at this stage go to final sanction more than 90% of the time.
The province said the revised deal exceeds terms negotiated in 2018 and is expected to generate up to $6.4 billion in direct revenue to Newfoundland and Labrador in the project’s first phase. That figure excludes potential upside from an equity participation clause that gives the province the option to take up to a 10% stake, which Wakeham said is actively being explored and could add hundreds of millions in further revenue.
The premier said Bay du Nord would involve $3.2 billion in capital expenditures and $15 billion in operating expenditures over the project’s life.
The agreement is also described as the province’s first life-of-field benefits agreement for an oil and gas project. Those benefits include royalties, more than 31 million person-hours of work over roughly 25 years, and a requirement that at least 95 per cent of subsea components be built in Newfoundland and Labrador.
Equinor had paused Bay du Nord in June 2023 after costs surged, halting movement toward Decision Gate 2, which would have advanced front-end engineering and design and early procurement. The current agreement resets the project after that pause and follows a transition in provincial government that delayed forward movement while benefits negotiations were reopened.
“From the outset, the premier was clear that any agreement must deliver real and lasting value for the people of this province, and that clarity shaped our discussions,” Tore Løseth, Equinor’s country director, said. “We see this agreement as the beginning of the next chapter of this partnership.”
The field sits about 500 kilometres offshore in the Flemish Pass Basin in roughly 1,200 metres of water, making it a deepwater development. If sanctioned, it would be Newfoundland and Labrador’s first new standalone offshore oil and gas development since Hebron, its first deepwater project, and its fourth producing offshore oil field.
Alongside the Bay du Nord agreement, the province cancelled a July 2025 non-binding memorandum of understanding that would have transferred control of the Bull Arm fabrication site to North Atlantic for a proposed renewable energy hub. Instead, the province will retain ownership and Equinor will contribute $200 million toward a large floating dry dock at Bull Arm.
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