Winnipeg, Manitoba — A Canadian offshore oil regulator said on Friday it has licensed a significant discovery by Equinor ASA off the country’s Atlantic coast, the first such license it has issued in two years.
Global oil companies are pumping billions of dollars into offshore drilling that yields profits at lower prices than some onshore production, although they are expensive to build. They can generate fewer emissions per barrel due to their massive scale, but they do still add to overall air pollution.
Canada’s Atlantic coast attracted extra attention as oil prices climbed last year, and Norway’s Equinor is close to a final decision on building its Bay du Nord project offshore of Newfoundland and Labrador.
The Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) said the latest Cappahayden K-67 discovery has an estimated 385 million barrels of recoverable oil, approximately 500 kilometres east of St.John’s, Newfoundland and Labrador. Bay du Nord has 500 million barrels of recoverable oil.
Equinor is evaluating how much of Cappahayden’s oil it can recover economically and technically, said spokesperson Alex Collins. The company has eight significant discovery licenses for offshore Canada.
Companies that explore must apply for a significant discovery licence once they discover oil and gas to preserve their rights to exclusively produce in that area, according to the C-NLOPB. Once a company is ready to produce oil or gas it must ask the regulator for a commercial discovery declaration.
Equinor owns 60% of the discovery, and BP PLC owns the remaining 40%, according to the licence.
Reporting by Rod Nickel in WinnipegEditing by Marguerita Choy and David Gregorio – Reuters