ST. JOHN’S, N.L. — Shell has agreed to acquire a 30 per cent non-operating interest in Equinor’s Bay du Nord offshore oil project east of Newfoundland and Labrador, the companies announced Friday.

Equinor will retain a 70 per cent stake and remain operator. Financial terms were not disclosed, and the agreement does not amount to a final decision to build the project.

Investment decision targeted for early 2027

Bay du Nord remains before a final investment decision. Equinor says the partners are targeting that decision for early 2027, subject to market conditions, regulatory approvals and each company’s internal process.

The project is finalizing front-end engineering and design. Its current concept calls for subsea wells tied to a floating production, storage and offloading vessel in the Flemish Pass basin, about 500 kilometres east of St. John’s.

Equinor estimates development spending at approximately C$14 billion. The initial phase contains more than 400 million barrels of estimated recoverable oil resources, with planned gross production capacity of 160,000 to 175,000 barrels of oil equivalent per day and first oil anticipated in 2031.

Shell returns as partner after BP exit

The agreement reshapes the ownership only three months after BP agreed to sell its 37.2 per cent interest to Equinor. That transaction made Equinor the sole owner while it looked for a new partner.

Shell described the proposed purchase as an entry into an established resource base with longer-term growth potential. The company emphasized that the project must still satisfy its investment criteria and compete for capital within its global portfolio.

For Newfoundland and Labrador, bringing in a second major energy company spreads the financial and execution risk of a large offshore development. It also gives Bay du Nord a new ownership structure ahead of the planned 2027 decision point. The announced transaction itself does not guarantee construction, production or the project schedule.

Sources: Equinor announcement, October 9; Shell announcement, October 9 at 8 a.m. Eastern; Reuters report, October 9.

Lead image: existing Trans Mountain pipeline file photograph by David Stanley via Wikimedia Commons, CC BY 2.0; representative Canadian energy-infrastructure image, not the Bay du Nord project.