The two-well drilling program, in partnership with Husky Energy, found no evidence of the presence of hydrocarbons.
“These results are disappointing, as we had hoped to add additional optionality to the near-field area at Bay du Nord,” Trond Jacobsen, Statoil Canada’s vice-president of exploration, stated in a news release.
“We will now take the time needed to evaluate the results before firming up any plans for additional drilling near-field to Bay du Nord.”
Statoil is also evaluating further drilling activities in the Flemish Pass, where it holds significant acreage, which includes a proposed 10-year drilling program of up to 10 wells starting in 2018 that is currently undergoing an environmental assessment.
The company is also assessing the commercial potential of the Bay du Nord discovery.
Initially, the company and its partners estimated that as much as 600 million barrels of recoverable oil were discovered in Bay du Nord. Following a 19-month drilling program completed last summer, that figure was said to be closer to 300 million, but Statoil, which has a 65 per cent interest in Bay du Nord, says the unsuccessful drilling program doesn’t change that figure.
Noia president and CEO Bob Cadigan was unavailable for comment, but a spokesperson for the group said Monday’s news was “disappointing” and “discouraging.”
St. John’s oil and gas industry consultant Rob Strong says the news is “disappointing, particularly in light of the hype that government had attached to this area” through an evaluation conducted by Beicip-Franlab for Nalcor Energy that identified the potential for 12 billion barrels of oil and 113 trillion cubic feet of gas in the Flemish Pass.
“Normally an oil company might say, ‘We’re further analyzing results of these wells and they will add to our knowledge of the area,’ but they’re not saying that,” Strong says.
Because it represents such a small portion of the 30,000-square-kilometre frontier basin, Strong says, it’s too soon to say this is the type of news that will have a negative effect on exploration in the Flemish Pass.
“There’s still a fair number of drilling commitments outstanding and nobody, to the best of my knowledge, has relinquished their acreage as of yet,” he says.
However, Strong says there will be some negative impact on the sector if the Seadrill West Aquarius rig contracted for Statoil’s drilling program isn’t picked up for use in other exploratory efforts.
“If you get a rig, then you need extra supply boats, you need an extra helicopter, you need extra people in warehousing, you need extra people working for cementing companies, mud companies, testing companies, logging companies, catering companies.
“There’s a significant ripple-down effect in the oil industry where one basic rig job, there’s a significant multiplier effect.”