Oil and gas firm Equinor has finalised a framework agreement with the Newfoundland and Labrador province and its Canadian partner Husky Energy for the development of the Bay du Nord deep-water project.

The project, which is located offshore Canada, is the first to be negotiated under Newfoundland and Labrador’s generic oil royalty regulations.

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Bay du Nord was discovered in 2013 and is expected to be sanctioned in 2020. The project is estimated to deliver first oil in 2025.

The government is expecting to invest a minimum of $75m in research and development, as well as education and training expenditures in the next ten years. Newfoundland and Labrador will gain 10% equity stake in the project.

“The Bay du Nord Project will provide significant benefits, including new employment opportunities over the life of the project.”

Located 500km offshore with a depth of 1,200m, the project has reserves of 300 million barrels of oil and unlocks a new basin, the Flemish Pass.

It is expected to generate more than $14bn in economic activity, including $3.5bn in government revenues, as well as creating around 22.3 million work hours throughout its life.

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In addition, the Bay du Nord deep-water project is expected to produce in-province fabrication of 5,000 metric tonnes.

Newfoundland and Labrador premier Dwight Ball said: “Today marks the global recognition of Newfoundland and Labrador as a preferred location for deep-water production.

“This government is dedicated to bringing economic activity to our doorstep and the Bay du Nord Project will provide significant benefits, including new employment opportunities over the life of the project.

“With today’s announcement, we take our first step into the new frontier, we mark a new era of deep-water exploration, as well as the opening of a new basin, the Flemish Pass.”