By Kjetil Malkenes Hovland

 

OSLO-Norway's Statoil ASA (STO) said Friday that a 19-month drilling campaign had found that the size of the remote Bay du Nord discovery off Newfoundland could be at the lower end of a previous estimate, which may make exploitation less viable.

The nine-well drilling campaign confirmed that the field's volumes are likely within the 2013 estimate of between 300 million and 600 million barrels of oil equivalent. The company kept the range, but said the recoverable volumes were potentially at the lower end.

"We are now working to assess whether this is commercial," said a Statoil spokesman.

The campaign consisted of three appraisal wells on the Bay du Nord discovery and four exploration wells nearby. In addition, the company said it had drilled two wells in areas outside of the discovery, one with ExxonMobil (XOM) and Royal Dutch Shell (RDSA.LN), and the other with Chevron (CVX), Shell and BP (BP.LN).

The company said it had found oil in two prospects in the area, called Bay de Verde and Baccalieu, and that it was working to mature more prospects that could add more volumes and help trigger a development.

"Of course we would have wanted to find more," the Statoil spokesman said. "But this is a gigantic area of 30,000 square kilometers, and it's still an early phase."

So far, only 17 wells have been drilled in the entire basin. Statoil has previously said that the basin had the potential to become a core producing area after 2020.

The Bay du Nord discovery is situated 500 kilometers northeast of St. John's, Newfoundland. Its oil is of a light crude quality, and the reservoir has been described as excellent. Statoil said some of the wells had been drilled at record speed, despite the harsh offshore environment in the area.

Statoil has a 65% stake in Bay du Nord, in a partnership with Husky Energy which has a 35% stake.

 

Write to Kjetil Malkenes Hovland at kjetilmalkenes.hovland@wsj.com

 

(END) Dow Jones Newswires

June 10, 2016 05:32 ET (09:32 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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