Norwegian energy giant Equinor (EQNR) has announced that it is postponing development of a $16 billion offshore oil project in Newfoundland.
Equinor said that it is halting plans for the Bay du Nord oil project for up to three years.
The offshore project has experienced significant cost increases, mostly due to poor market conditions, the company said in a written statement.
The Bay du Nord comprises five different offshore fields that are estimated to hold a total of 979 million barrels of recoverable oil.
The Bay du Nord project would open Newfoundland’s fifth offshore oilfield and be the province’s first deep-water oil project.
Canada’s federal government gave the project environmental approval in April 2022, drawing criticism from environmentalists who object to underwater oil extraction.
This past March, a lawyer representing environmental and Indigenous groups argued in federal court that government approval of the project was flawed because it did not consider all potential greenhouse gas emissions.
Equinor had not previously committed to making the full investment necessary to carry the offshore oil project through to completion.
The future of the Bay du Nord project, which was scheduled to produce its first oil by 2029, is now in doubt.
Equinor’s stock has declined 31% in the last 12 months to trade at $25.33 U.S. per share.
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