(Adds licensing milestone, Equinor comment)
By Rod Nickel
WINNIPEG, Manitoba, Feb 3 (Reuters) - 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 Winnipeg
Editing by Marguerita Choy and David Gregorio)
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