By Ketki Saxena
Investing.com -- Norwegian energy giant Equinor has announced a delay of up to three years for its $16 billion Bay du Nord oil project situated off Newfoundland's east coast. The company cited significant cost increases in recent months as the primary reason for the postponement, with volatile market conditions causing complications.
Trond Bokn, Equinor's senior vice-president of project development, stated that the company will be reassessing the project to explore potential "further optimizations." The Bay du Nord project consists of five different discovery areas believed to hold a combined total of 979 million barrels of recoverable oil.
The decision to delay the project comes as a blow to the Canadian oil industry, which has been struggling with various challenges in recent years. The Newfoundland government had high hopes for job creation and economic growth stemming from the Bay du Nord project. Approved by Canadian Prime Minister Justin Trudeau last year, the project faced criticism from environmental groups concerned about its potential impact on climate change and marine life.
During the postponement, Equinor and its partner BP (LON:BP) will continue working on the development of the project. Once operational, Bay du Nord is expected to produce up to 200,000 barrels of oil per day, significantly boosting Canada's oil production capacity.