Calgary, Alberta, September 19 (Reuters) – President of Canadian operations for oil production company Equinor EQNR.OL He said on Tuesday that he was more optimistic that the Norwegian company would go ahead with its Bay du Nord offshore project, four months after the project was postponed for up to three years due to rising costs.
“That’s our feeling right now, and we really want to make it happen,” Torey Loseth, Equinor’s head of Canada, said in an interview at the World Petroleum Congress in Calgary.
“In many ways I feel more optimistic.”
The Gulf du Nord, located off the Atlantic coast of Newfoundland and Labrador, will be one of Canada’s largest oil projects in years. It already has rare support from Prime Minister Justin Trudeau’s government, which has said the Gulf du Nord would produce relatively low emissions.
Equinor had planned to produce first oil by the late 2020s, and its recoverable reserves of 500 million barrels could last for 20 years.
The last publicly released estimate of the cost of the Gulf du Nord was C$16 billion ($11.90 billion) before the decision to postpone it, and Loseth said private estimates have increased significantly.
“We know we need to get the cost down a little bit,” he added.
The head of the International Energy Agency said last week that global oil demand will peak by 2030, leaving some assets at risk of being stranded.
Loseth said he is confident that Gulf du Nord will have a place in the energy mix in the long term due to its low emissions.
Equinor is not looking to sell part of its 60% stake in Bay du Nord to cut its costs, Loseth said. BP PLC BBL Owns 40%.
Newfoundland Energy Minister Andrew Parsons said Equinor has not made financial requests to the provincial government since the project was suspended. He also feels hopeful.
“We may feel more optimistic than we have in a while,” Parsons told Reuters after meeting with Equinor officials on Monday.
He said he based his optimism on the fact that Equinor is still drilling offshore exploration wells. This drilling will help Equinor clarify where it should extract oil in the Gulf du Nord, boosting the economics of the project, Loseth said.
($1 = 1.3446 Canadian dollars)
(Reporting by Rod Nickel in Calgary, Alberta; Editing by Lincoln Feast)
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