Statoil's announcement was met with applause at the Newfoundland and Labrador Oil and Gas Industries Association (NOIA) 2012 conference.
In addressing delegates at the St. John's Convention Centre, Atle Aadland, vice-president of Statoil Canada Offshore, said at least 100 million to 200 million barrels of recoverable oil rests at the Mizzen area in the Flemish Pass Basin, offshore Newfoundland.
The company first discovered oil in the area in 2009. It drilled the area again in 2011. Wednesday afternoon's announcement was the first word on the results.
Further work can be expected in Flemish Pass Basin
The amount of oil estimated at Mizzen is not a phenomenal amount at first comparison. Total reserves at Hibernia for example - both what has been taken from the ground and what remains - are estimated at 1.4 billion barrels. That said, the oil reserves at Mizzen are just starting to be defined.
Initial estimates tend to be low. In its infancy, Hibernia was thought to have only several hundred million barrels of oil, instead of more than a billion.
What comes next
Aadland said there will be no move to develop Mizzen into a producing oil project at this point.
"Our focus right now is to prove up the resource potential in the Flemish Pass Basin by continuing to explore for additional volumes of oil," he told NOIA members. "From 2012-2013, we are drilling two new new wildcat wells in the area and potentially additional wells in 2014 and beyond."
So further work, fuelled by Statoil dollars, can be expected in the frontier Flemish Pass Basin.
Nalcor Energy vice-president Jim Keating followed Aadland on the list of conference presenters. Before launching into an update on the work of Nalcor Oil and Gas, Keating took a moment to tip his hat to Aadland and the Statoil announcement.
"In the presence of your exploration team, we just need one more round of applause," he said, with the crowd joining in.
Potential for future
The discoveries in the Jeanne d'Arc Basin have made names like Hibernia, White Rose and Terra Nova well-known. At the NOIA conference, there was a buzz over the hope further exploration work might, over time, bring names from the Flemish Pass - Cupids, Harpoon, Bay du Nord and, yes, Mizzen - to a similar status.
There was clear excitement, despite the fact the Flemish Pass Basin is about 500 kilometres offshore - more than 100 kilometres further from St. John's than where Newfoundland and Labrador's producing oil projects are found.
Mizzen is also a deep water site. Drilling for wells in the area begin about 1,100 metres beneath the water surface.
Statoil staff "have the confidence and capacity" to handle work in the Flemish Pass, Aadland said, with experience in deep water off Brazil, the Gulf of Mexico and Norway.
"Statoil has an extreme amount of experience in harsh climates. ... If there was any company you would hope to have a find in an area like the Flemish Pass Basin, you would want it to be a company like Statoil," NOIA's Bob Cadigan told The Telegram.
"It's a basin that's had 10, plus or minus, wells - that's all that's ever been drilled in that basin. And to have a discovery in the 100-200 million barrel size, is a really positive thing."
Aadland would not share estimates as to exactly how much money Statoil might spend locally in the coming years.
However, in the last two years, the company itself has seen "100 per cent growth" in its local operations. About 40 people now work with Statoil in Newfoundland and Labrador and the company has opened a new office in St. John's. "(It's) a very small team, a very strong team," Aadland said.
He himself moved to Newfoundland and Labrador March 1 of this year. "It's a fantastic place to be," he said.
This is a corrected version.