OPINION: Equinor and its partners reached a final investment decision this week on what will be the biggest offshore development undertaken by an international oil company in Brazil.
The $8 billion Bacalhau project will start with a floating production, storage and offloading unit able to handle up to 220,000 barrels per day with a breakeven price of less than $35 per barrel.
Equinor, which boasts one of the strongest commitments to the energy transition among peers, is moving towards a second big oil and gas project sanction in Brazil.
Its BM-C-33 development was given a powerful boost in March when Brazil approved a far-reaching reform of the gas sector.
Meanwhile, with crude prices pushing past $70 per barrel, TotalEnergies has begun engaging with suppliers ahead of an order for a 120,000 bpd FPSO in Suriname.
Both European operators are quietly cooing about these new South American projects, even though they are hard to reconcile with this month's International Energy Agency (IEA) report advocating a halt to new oil and gas projects if targets to curb global temperature rises are to be met.
But the inconsistencies are not as deep as they seem. These are world-class projects that can move forward even as oil and gas investments enter a cycle of terminal decline.
A blanket call for ending new projects captures the headlines, but a geared approach to ditching fossil fuels is more realistic and perhaps more in tune with the expectations of developing countries harbouring such world-class assets.
(This is an Upstream opinion article.)