Nfld. & Labrador

Statoil plans 2 exploration drills in Flemish Pass Basin

​Statoil has confirmed it is planning two exploration drilling programs in Newfoundland's offshore oil industry later this year.

The wells are planned near the Bay du Nord discovery

The West Hercules drilling rig is pictured in the Skaanevik fjord in western Norway. Statoil confirms it will be drilling two exploration wells in the Flemish Pass Basin. (Statoil/Canadian Press)

Statoil has confirmed it is planning to drill two exploration wells in the Flemish Pass Basin east of Newfoundland later this year.

In a release Tuesday morning, the company said the two planned wells are near the 2013 Bay du Nord discovery.

The drilling is expected to begin mid-2017. 

The Norwegian oil company said in November it was looking for expressions of interest for a subsea and marine study of the Bay du Nord discovery, roughly 500 kilometres east of St. John's.

A map showing Statoil interests in the east coast offshore. (Statoil)

The exploration drilling could bring hundreds of new jobs to Newfoundland's offshore oil sector.

Alex Collins, a spokeswoman for the company, says staffing for this round is still being finalized — but in the past, drilling programs have created spinoff jobs into the rest of the oil and gas sector.

"Statoil drilling programs offshore Newfoundland have historically seen employment related to drilling exceeding 500 people, including the rig and the broader reach into the supply and service community," she said.

A contract for an oil rig to service the exploration has not yet been finalized.

Government welcomes announcement

Newfoundland and Labrador's Department of Natural Resources tweeted Tuesday's announcement was "good news" for the province's offshore industry, adding there is significant and long-term potential in the resource.

Four years ago, Statoil and its partners announced there was a significant quantity of oil discovered in the Flemish Pass Basin, estimated between 300 and 600 million barrels in Bay du Nord.

After a 19-month drilling program concluded last year, Statoil confirmed the amount of recoverable oil was on the lower end of that estimate.

Collins said Tuesday that it was standard practice to drill multiple wells to get a good sense of an exploration area.

Collins said it was far too early to speculate on barrel potential in the area.

Development in the Flemish Pass would pose significant challenges not faced elsewhere in Newfoundland's offshore.

The water depth in the area is more than 1,000 metres, compared to 100 to 150 metres in the Jeanne d'Arc Basin.

With files from Terry Roberts