Statoil says its 2009 discovery at Mizzen put the company more than halfway to the amount of recoverable oil needed to make production viable in the Flemish Pass.
Current company estimates show roughly 150 million barrels at Mizzen.
This week, Statoil announced a second discovery in the area, at the Harpoon well just 10 kilometres away from Mizzen. The company is not providing any details on the volume of oil found at Harpoon.
CBC News asked how much Statoil needs to have a viable basin in the Flemish Pass.
"We need probably at least 250 million barrels, or more," Erik Finnstrom, Statoil’s senior vice-president of exploration for North America, said in an interview.
"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 250 (million)."
So, with the estimate of 150 million barrels at Mizzen, Statoil is more than halfway there?
"Yes," said Finnstrom.
Plans for 3rd well in Flemish Pass
Speaking earlier Thursday at the NOIA conference, he said Mizzen was "not big enough to drive a standalone development."
But he said the Mizzen, Harpoon and Bay du Nord structures in the Flemish Pass "are close enough together to give significant synergies, should we be doing development in the area."
Statoil plans to drill at nearby Bay du Nord later this year.
"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," Finnstrom told NOIA delegates in a keynote address to close the conference.
'There’s still more drilling to be done, but we are close.' —Statoil's Erik Finnstrom
He referenced Statoil’s long-held aspiration to become a producing operator off Canada’s East Coast.
"There’s still more drilling to be done, but we are close," he said.
Finnstrom told CBC News that Bay du Nord has the largest geological structure, and the results at Harpoon raise the chance of success there.
"It’s the biggest thing there — the one we’re probably most excited about now."
He said Statoil could return to Harpoon while it has the West Aquarius drilling rig in the region, depending on the time and budget available. Otherwise, additional drilling at that site will happen at some point in the future.
"It could be as late as 2015, or as early as the end of this drilling campaign that we’re on right now," Finnstrom said.
On Wednesday, Statoil made waves when it said it has discovered light, high-quality oil in the Flemish Pass basin, 500 kilometres northeast of St. John’s.
The announcement further raised hopes for an as-yet untapped part of the Newfoundland offshore.