Statoil Canada says that while its Mizzen property off Newfoundland's east coast is substantial, there are no guarantees it holds enough oil to make deepsea drilling there profitable.

Geir Richardsen on this week's Mizzen announcement: 'We think that this is very, very positive.' (Statoil )

Statoil told a St. John's oil conference earlier this week that current estimates show that Mizzen — which has long been a subject of buzz in the industry — contains between 100 million and 200 million barrels of oil.

While that is quite a lot, Geir Richardsen, Statoil Canada's vice-president for exploration, said the company needs to find more before it can move to a development plan.

"We would need to see if we can find more resources in the area to have a commercially viable development and that is why we will go ahead and explore more in the area," Richardsen said in an interview.

In shallow waters in another location, Mizzen's resources would be enough to prompt a development plan.

But Mizzen is in an area called the Flemish Pass, north of the Jeanne d'Arc Basin, where all of the other commercial finds of oil — starting with Hibernia, which was discovered in 1979, and including Hebron, which will go into production in about five years — have been developed.

Mizzen is about 500 kilometres from land, and under about 1,100 metres of water, which together pose challenges for Mizzen as it moves forward.

Exploratory wells are expected to be drilled later this year, with research continuing into 2013.

Strong potential

Richardsen said the field, which has the potential to become the fifth field to go into production off eastern Newfoundland, is important because it opens up a new area in the offshore to development.

"It's a significant discovery," he said. "It shows that this area, which is north of the producing fields, is a working system. We think that this is very, very positive."

Statoil started working with Husky Energy on the Mizzen prospect in 2008.

Statoil's announcement dominated developments at this week's Atlantic Canada Petroleum Show, giving a boost to conventioneers who feel the Newfoundland and Labrador industry is still gathering momentum.

[There is a] great, great future. It's just starting, really," said Don Noseworthy, senior vice-president with St. John's-based Pennecon.

"We have great reservoirs out there, I think, that we know nothing about … It's a great area to be, I think, in the world."