ST. JOHN’S — A proposed deepwater oil project off the Canadian east coast reached a key milestone Tuesday as the Newfoundland and Labrador government signed an agreement with Equinor on how to divvy up the development’s anticipated rewards.

Premier Tony Wakeham received several standing ovations as he unveiled the benefits agreement for the Bay du Nord project at a St. John’s, N.L., hotel, flanked by executives from Equinor and project partner BP.

The project has hit several stumbling blocks and been a source of anxiety, speculation and strident election promises in a province carrying one of the highest per-capita net debts in the country. Wakeham was quick to thank Prime Minister Mark Carney for championing Canadian energy and scrapping plans for proposed limits on oil and gas emissions.

“Where once we had a federal government who told us what we cannot do, we now have a federal government who tells us what we can do,” Wakeham boomed, drawing more applause from the crowd of about 250 people packed into a conference room to hear the news.

Under the agreement, the Bay du Nord project would provide up to $6.4 billion in direct revenue to the Newfoundland and Labrador government over its first 25-year phase, through royalties, taxes and a possible equity stake, officials said.

Equinor will also provide the government with a $200 million “fabrication fund,” which Wakeham said would be use to build a floating dry dock capable of serving ships weighing more than 18,000 tonnes.

Bay du Nord would be the country’s first deepwater oil project, farther from shore than any other oil project in the world, and beyond the 370-kilometre exclusive economic zone, officials said. Developments outside this zone would typically be subject to financial obligations under the United Nations Convention on the Law of the Sea.

However, the federal government has agreed to cover those fees, said Joanne Thompson, the federal fisheries minister. They could reach $1 billion, officials said in a media briefing.

Equinor is still considering whether to proceed with the $11.9-billion development off the coast of St. John’s, and the company is expected to make a final investment decision next year. It has spent the past few years overhauling the project to cut costs after announcing in 2023 that it needed to temporarily shelve its plans and make them more affordable. Loseth said the outlook on the project now is much better. “We’ve never been closer,” he told reporters.

Wakeham, a Progressive Conservative, campaigned last year on promises to ensure certain construction work on the project would be completed in Newfoundland and Labrador. In particular, he wanted to see so-called “topsides” work — equipment above the waterline — on Bay du Nord’s floating, production and storage vessel done locally.