Statoil to reveal results of Flemish Pass drilling program this summer
Company says it will invest in projects that provide good long-term returns
Results of a drilling campaign in the highly touted Flemish Pass Basin will be made public early this summer, says an official with the Norwegian-based oil and gas company Statoil.
The West Hercules semi-submersible arrived in Bay Bulls Thursday after completing an 18-month exploration and appraisal program, and the findings will be critical to Statoil's efforts to become a producing operator in Newfoundland's offshore.
Statoil and Husky Energy are co-venturers in the Flemish Pass, a deep water frontier area where so-called "high impact" discoveries have already been reported, with names likes Bay du Nord, Mizzen and Harpoon tossed around with high hopes by industry enthusiasts.
"The Flemish Pass Basin is important to Statoil," a company spokesperson wrote in an email to CBC News.
Potential 'core' producing area
The company is betting big on this region, located roughly 500 kilometres northeast of St. John's, with Statoil's executive vice-president of exploration, Tim Dodson, stating a few years ago that the Flemish Pass has the potential to become a core producing area for Statoil "post-2020."
But Dodson made the comment prior to the 2014 collapse in world oil prices, and the landscape has changed dramatically since.
Projects throughout the world have been deferred or cancelled, and formal talks between Statoil and the Government of Newfoundland and Labrador on a development agreement broke off last fall.
Like most companies, Statoil has reduced costs and improved efficiencies in recent months in response to market challenges, and is prioritizing investments into projects with good long-term returns.
"We will choose the best projects and opportunities first, allowing the rest to mature for future value creation," a Statoil statement reads.
"Bay du Nord is no exception from this approach, which makes the current exploration program important to help further our knowledge of the potential of the area."
Where the West Hercules goes next is unclear, a sign of the struggle that continues in the oil sector.
The rig was scheduled to begin a new contract with Statoil in Norway after concluding its work in the Flemish Pass, but rig owner Seadrill announced May 23 that the contract had been terminated.
"The West Hercules is currently being marketed for new work," Seadrill stated in a news release.
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