Statoil is moving ahead with a multi-well drilling campaign offshore Newfoundland and Labrador, with a semi-submersible rig to be in the province to begin the work later this year.
Drilling work will be focused in the Flemish Pass Basin, about 500 kilometres northeast of St. John’s, according to a vice-president of exploration for Statoil, Geir Richardsen.
Statoil has three finds in the basin — at the Bay du Nord, Harpoon and Mizzen sites.
In 2013, Bay du Nord was revealed as the company’s biggest oil discovery outside Norway and the world’s largest conventional oil discovery of the year by volume, with an initial estimate of 300 million to 600 million barrels recoverable.
“What we’ve decided to do after last year’s discoveries is to come back and drill more wells in that area,” Richardsen said.
“The rig will be here later this year. It will start on a campaign which is going to be 18 months of drilling, so one and a half years as a minimum commitment and we will start of course a program in and around the Bay du Nord area,” he said.
The plan is for a combination of appraisal wells and new exploration wells, meaning the drilling campaign will have the potential to result in the identification of new resources.
There is no set number at this point for how many wells will be drilled.
The work does not mean any guarantee of an oil development. It is the company gathering more information to weigh in considering future work, particularly at the Bay du Nord prospect area.
“A decision on a development is going to be dependent on the results we see in the upcoming drilling,” Richardsen said.
About 500 people are expected to be employed on the Statoil drilling program, directly and through contractors from the supply and service community.
In addition to confirmation of the extended drilling program, the company has designated Newfoundland and Labrador as a core exploration area. This means the ability to prioritize resources for the area, such as the drilling rig now expected in 2014.
On top of the exploratory drilling, the company will be undertaking a 1,900 square kilometre seismic program this summer.
The work commitment comes alongside a fourth quarter financial report for Statoil’s international business, where the company presented a plan to reduce capital spending in 2014-16 over previously stated plans — to the tune of $5.5 billion (US$5 billion).
Despite pulling back spending, Statoil has gone ahead with announcing clear commitments for Eastern Canada. Richardsen said the work announced was ranked, as per the company’s regular reviews, landing high enough to warrant the investment.
“For offshore Newfoundland, that is a good story,” he said.
Offshore Newfoundland and Labrador has today been named a core area of exploration for Statoil, with the company prioritizing work in the province's Flemish Pass Basin.
Addressing investors this early morning, Statoil leadership announced the company will bring a semi-submersible rig capable of deepwater work to the province and move ahead with drilling more exploration wells in its offshore acreage within the next two years.
Statoil has three finds in the Flemish Pass Basin, about 500 kilometres northeast of St. John's — at the Bay du Nord, Harpoon and Mizzen sites.
In 2013, Bay du Nord was revealed to be the company's biggest oil discovery outside Norway, with an initial estimate of 300 million to 600 million barrels recoverable.
More to come.