Statoil makes Canada oil discovery off Newfoundland


Statoil makes Canada oil discovery off Newfoundland


STAVANGER -- Statoil said it made a big discovery of light oil offshore Newfoundland, the latest find in Canada's Atlantic region, a fast growing petroleum play that's often overshadowed by the country's western oil sands developments.

Statoil said it made a discovery of light high-quality oil in the Flemish Pass basin at its Harpoon prospect. The field is located about 300 mi northeast of St. John's, the capital of the Canadian province of Newfoundland and Labrador.

"While it is still too early to determine Harpoon's resource potential at this time, this is very encouraging for the area," said Erik Finnstrom, Statoil's senior Vice President for North America.

Statoil made the find drilling in about 3,600 ft of water, about six mi from the company's Mizzen discovery. Statoil estimates that field holds as much as 200 MMbbl of oil, a significant new deposit discovered at a time when big energy companies have struggled to find them.

Statoil operates both the Harpoon and Mizzen fields with partner Husky Energy.

The discovery comes amid a boom in North American energy output, triggered by new drilling and extraction techniques that are squeezing out fresh volumes of natural gas and crude trapped in rock formations in the United States in Canada, investors have poured money into developing oil sands deposits in Alberta.

But big energy players have also targeted Canada's Atlantic basin, currently producing over 250 Mbpd of crude, a big chunk of Canada's overall production of some 3.5 MMbpd, according to the United States Energy Information Administration.

Most of that currently comes from Exxon Mobil's Hibernia field, which came online in 1997. In January, Exxon said it would spend $14 billion developing its Hebron oil field, with estimated reserves of some 700 MMbbl.

Dow Jones Newswires

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