A North Dakota farmer who discovered an enormous oil spill while harvesting wheat says crude was bubbling up out of the ground when he found it.

Steve Jensen said he smelled the crude for days before the tires on his combines were coated in it. At the apparent break in the Tesoro Corp.'s underground pipeline, the oil was "spewing and bubbling six inches high," he said Thursday.

What Jensen had found on Sept. 29 turned out it was one of the largest spills recorded in the state. At 20,600 barrels it was four times the size of a pipeline rupture in late March that forced the evacuation of more than 20 homes in Arkansas.

But it was 12 days after Jensen reported the spill before state officials told the public what had happened, raising questions about how North Dakota, which is in the midst of an oil boom, reports such incidents.

The spill happened in a remote area in the northwest corner of the state. The nearest home is a about a kilometre away, and Tesoro says no water sources were contaminated, no wildlife was hurt and no one was injured.

The release of oil has been stopped, state environment geologist Kris Roberts said Thursday. And the spill, which spread out over three hectares, has been contained.

Gov. Jack Dalrymple, who says he wasn't even told about what happened until Wednesday night, said the state is now investigating its procedures for reporting spills.

"There are many questions to be answered on how it occurred and how it was detected and if there was anything that could have been done that could have made a difference," Dalrymple told reporters on Thursday. "Initially, it was felt that the spill was not overly large. When they realized it was a fairly sizable spill, they began to contact more people about it."

Tesoro Logistics, a subsidiary of the San Antonio, Texas-based company that owns and operates parts of Tesoro's oil infrastructure, said in a statement that the affected portion of the pipeline has been shut down and the company would fully remediate the contaminated farm land at an estimated cost of $4 million.

Wayde Schafer, a North Dakota spokesman for the Sierra Club, said the spill is an example of the lack of oversight in a state that has exploded with oil development in recent years.

"We need more inspectors and more transparency," Schafer said. "Not only is the public not informed, but agencies don't appear to be aware of what's going on and that's not good."