BP to sell Bay du Nord interest to operator Equinor

BP announced this week that it had reached an agreement to sell its non-operated interest in the Bay du Nord project offshore Newfoundland and Labrador, Canada, to operator Equinor. The deal will see Equinor become the 100% owner of the project.

In a July 6 announcement, BP described the move as being consistent with its continued focus on portfolio simplification and disciplined capital allocation. The transaction also comes shortly after Meg O’Neill took over as CEO of BP in April, but BP’s push to prioritise higher-return oil and gas projects had been underway for some time prior to this.

Bay du Nord is located in the Flemish Pass Basin, around 500 km offshore Newfoundland and Labrador. The project’s development concept entails a floating production, storage and offloading (FPSO) facility and subsea tiebacks. Equinor noted in a separate announcement that the project had reached the front-end engineering and design (FEED) stage, with continued work focused on “strengthening capital efficiency, execution planning, and overall project robustness”.

Equinor is targeting a final investment decision (FID) on Bay du Nord in early 2027, though it said this remained subject to market conditions, regulatory approvals and internal approvals.

“Over the past few years, we have strengthened Bay du Nord by improving the business case and reducing key risks,” stated Equinor’s executive vice president for international exploration and production, Philippe Mathieu. “This transaction reflects our confidence in the project as we continue maturing it towards a final investment decision. We will seek opportunities to bring in partners as part of the project's further development.”

Equnior estimates that developing Bay du Nord will require an investment of roughly CAD14bn ($9.9bn).

BP currently holds interests across 10 licences associated with Bay du Nord, representing an average working interest of 37.212%. The supermajor noted that it would retain its 100% interest in two exploration licences offshore Newfoundland and Labrador, EL 1166 and EL 1170.

“We’re proud of our partnership with Equinor and the work we’ve done together to develop the Bay du Nord project,” stated BP’s executive vice president of upstream, Gordon Birrell. “However, BP is exercising strict capital discipline, allocating it to the opportunities that create the most value for BP.”

The financial terms of the transaction were not disclosed.