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CALGARY — Newfoundland’s government is touting a major offshore discovery as the start of a new chapter in the province’s oil industry, and a reason for international energy companies to consider investments there.
Statoil ASA of Norway said Thursday its discovery in the Flemish Pass Basin, called Bay du Nord, could hold 300 million to 600 million barrels of light oil. The upper end of that range would be Newfoundland’s third-largest discovery. Statoil’s partner in the project is Calgary-based Husky Energy Inc.
Bay du Nord represents the partners’ third oil discovery in that area. The find is in deeper North Atlantic water and farther off the coast from the Jeanne d’Arc Basin, where the Hibernia, Terra Nova and White Rose fields produce, and the $14-billion Hebron field is under development.
“That’s good news for us and it certainly will encourage increased offshore exploratory activity. It’s one of the largest offshore oil fields to be discovered off Canada,” Tom Marshall, Newfoundland’s Natural Resources Minister, said in an interview.
“I think that announcement is going to make other players take a closer look.”
Some of those players might come from across the Pacific. During a trip to China this summer, Mr. Marshall and Premier Kathy Dunderdale pitched frontier energy opportunities to state-owned CNOOC Ltd. and Sinopec, which have been major investors in Alberta’s oil sands but absent in the Atlantic offshore. He said he also recently urged Royal Dutch Shell PLC consider picking up acreage.
Newfoundland’s projects currently pump about 250,000 barrels a day, roughly a tenth of Alberta’s total output. Hibernia had the largest initial reserves at more than 1.4 billion, followed by Hebron at more than 700 million.
Bay du Nord is 500 kilometres northeast of St. John’s. The other two finds are Harpoon, announced in June, and Mizzen, drilled in 2009. Husky estimates Mizzen to hold 130 million barrels and the partners are still assessing Harpoon. All three, in water depth of just over a kilometre, could be developed together some time after 2020. Statoil has a 65-per-cent stake and Husky the remainder.
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