Statoil has made its second discovery of light, high-quality oil in the Flemish Pass basin offshore Newfoundland, Canada.
While the Norwegian company said that it was not yet in a position to judge the find’s resource potential, it was clear from comments from a senior VP at the company that hopes are high that the basin will indeed eventually yield commercial quantities of hydrocarbons.
Statoil made its latest discovery while drilling on its Harpoon prospect in 1,100m of water on licence EL 1112 about 500km north-east of the Newfoundland capital, St John’s.
Harpoon lies 10km south-east of the 2012 Mizzen oil discovery that Statoil estimated to hold 100-200million barrels of oil in place. The company has already indicated that it is more than halfway towards having a viable commercial development on its hands with 150million as the latest estimate for Mizzen.
Erik Finnstrom, senior VP for exploration at Statoil’s North America business unit, said: “We anticipate there will be further appraisal drilling to mature this discovery in the future. We will continue to build this area as a core exploration region for Statoil.”
He told CBC News: “We need probably at least 250million barrels, or more.
“That would probably be what we would call an economic threshold but, ideally, to make such a large-scale investment decision, you would even want more than that. It’s hard to say. But an absolute minimum would be 250million.”
He told delegates at this year’s Newfoundland Offshore Industries Association (NOIA) conference that Mizzen was “not big enough to drive a standalone development”.
However, he said that Mizzen, Harpoon and the nearby, about to be drilled, Bay du Nord prospect are close enough together to provide significant synergies, “should we be doing development in the area”.
Finnstrom said in a keynote: “The work we’ve done leading up to the decision to drill Harpoon and Bay du Nord has pointed in the direction of a large petroleum system in the basin, not just an isolated limited system around Mizzen.
“There’s still more drilling to be done, but we are close (to commerciality),”
As part of its 2013 three-well exploratory programme off Newfoundland, Statoil is currently drilling on the Federation prospect in the Jeanne d’Arc basin.
The company is thereafter scheduled to return to Flemish Pass to drill the Bay du Nord prospect located south-west of the Harpoon and Mizzen discoveries. Seismic survey and interpretation work points to Bay du Nord being a larger prospect than its successful drilled neighbours.
Finnstrom indicated too that Statoil could return to Harpoon while it still has the West Aquarius drilling rig in the region, depending on the time and budget available.
“It could be as late as 2015, or as early as the end of this drilling campaign that we’re on right now,” he added.