Statoil ASA (NYSE:STO) has discovered crude oil in the Bay du Nord exploration off the Canadian coastline. Approximately 300 to 600 million barrels of recoverable oil reserves were discovered in this area, which is located approximately 500 kilometers/ 300 miles northeast of St. John’s, Newfoundland and Labrador.
Figure 1: Map of Bay du NordSource: Statoil
A discovery had already been announced in August in the Bay du Nord area and a sidetrack well was dug to confirm the quantity of reserves available. The well was completed this week, confirming the existence of significant oil reserves. “The Bay du Nord well encountered light oil of 34 API and excellent Jurassic reservoirs with high porosity and high permeability,” reports Statoil ASA (NYSE:STO).
This discovery is considered a high impact discovery by Statoil’s definition as it comprises oil reserves worth higher than 250 mmboe to the well. Statoil holds a 65 percent stake as the operator of Bay du Nord while the remaining 35 percent is held by Husky Energy.
The Bay du Nord will be the largest discovery by Statoil
This recent discovery is the third discovery to Statoil ASA (NYSE:STO)’s credit in the Flemish Pass Basin. The first was in the Mizzen oil wells where the recoverable reserves were estimated at 100 to 200 million barrels of oil. The second discovery was announced in June 2013 and was located in Harpoon oil wells. The evaluation of Harpoon is still under way but it can safely be assumed that the Bay du Nord will be the largest discovery by Statoil in the Flemish Pass Basin.
“All three discoveries are in approximately 1,100 metres of water. Mizzen was drilled by the semi-submersible rig Henry Goodrich (2009). The Bay du Nord and Harpoon wells were drilled by the semi-submersible rigWest Aquarius (2013),” says Statoil.
Statoil ASA (NYSE:STO) recognized the opportunity in this area and was one of the first players to start drilling in the Flemish Pass and was introduced the world to the new oil play offshore Canada. This early entry has paid for the company and hence the Flemish Pass area, according to Statoil, has the “potential to become a core-producing area for Statoil post-2020.”
“It is exciting that Statoil is opening a new basin offshore Newfoundland,” says Tim Dodson, executive vice president of Statoil Exploration. “This brings us one step closer to becoming a producing operator in the area. With only a few wells drilled in a large licensed area, totaling about 8,500 square kilometers, more work is required. This will involve new seismic as well as additional exploration and appraisal drilling to confirm these estimates before the partnership can decide on an optimal development solution in this frontier basin.”
Statoil has vast experience in operating in the Caspian Sea
Statoil ASA (NYSE:STO) is a Norway-based multinational which is currently operating in 34 countries. Statoil has vast experience of operating in the Caspian Sea and is a strong player in offshore activities. Statoil ASA (NYSE:STO) is leading among all exploration companies in terms of conventional discovered volume.