Shell plc agrees to buy 30% of Bay du Nord before 2027 investment decision
Equinor keeps 70 per cent and expects first oil in 2031; its project page estimates C$14 billion in initial investment.
Ines Halvorsen
An Oct. 9 agreement to acquire 30 per cent of Bay du Nord would bring Shell plc LONSHEL NYSESHEL into the proposed offshore oil development alongside Equinor ASA NYSEEQNR. Equinor's project page, viewed Oct. 10, estimates initial investment at about C$14 billion, while its Oct. 9 deal announcement gives no purchase price for Shell's stake. Equinor is selling the interest, would retain 70 per cent and remain operator; the announcement sets no closing date or fixed term for the interest.
Shell shares closed Friday down two cents at US$100.18 in New York, according to NYSESHEL at 4:00:04 p.m. EDT. Equinor shares closed Friday up nine cents at US$43.01 in New York, according to NYSEEQNR at 4:00:02 p.m. EDT.
Equinor said in its Oct. 9 statement that front-end engineering and design is being finalised. The operator is targeting a final investment decision in early 2027, subject to market conditions, regulatory approvals and each company's internal process. Until those decisions, the estimated C$14 billion remains a development cost estimate rather than committed construction spending. The release does not specify Shell's payment or which development expenses Shell would assume before sanction.
The project page viewed Oct. 10 describes an initial phase spanning the Bay du Nord and Cambriol discoveries, with more than 400 million barrels of estimated recoverable oil. It expects first oil in 2031, while its key figures are explicitly subject to project maturation and a final investment decision. The development concept relies on a floating production, storage and offloading vessel and subsea tiebacks about 500 kilometres offshore, according to Equinor's Oct. 9 release.
"The transaction supports Equinor’s approach to portfolio management, capital allocation and risk sharing in large-scale developments," Equinor said in its Oct. 9 release.
In its Oct. 6 outlook, the U.S. Energy Information Administration forecast Brent crude at an average US$105 a barrel in the fourth quarter of 2026. It forecast US$84 a barrel for 2027. Those are market forecasts, while Equinor's Oct. 9 announcement gives no oil price assumption or return estimate for Bay du Nord.
Federal Environmental Decision Carries Conditions
Canada's minister of environment and climate change issued an environmental assessment decision for Bay du Nord on April 6, 2022, after the Impact Assessment Agency of Canada reviewed the proposed development. The decision determined the development was unlikely to cause significant adverse environmental effects after considering mitigation measures and set conditions Equinor must meet. The statement says the Canada-Newfoundland and Labrador Offshore Petroleum Board may need to authorize activity. Fisheries and Oceans Canada may also need to issue authorizations, separate from the companies' decision to sanction spending.
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Shell would hold a non-operating interest under the agreement, while Equinor would remain responsible for operating the development. Equinor's Oct. 9 announcement says capital efficiency and execution planning remain works in progress. It gives no vessel delivery date or offshore installation schedule, so the expected 2031 first-oil date has no equipment timetable attached in that statement.
The next dated milestone is Equinor's targeted final investment decision in early 2027. That decision remains subject to market conditions, regulatory approvals and both companies' internal processes before construction spending is sanctioned.
