Oslo - Norway's Statoil ASA is “weeks away” from reaching a deal with the government of Newfoundland and Labrador to develop the company's 600-million-barrel Bay du Nord oil discovery off the Canadian province's Atlantic coast, the province's premier said on Tuesday.
Newfoundland Premier Paul Davis said the province was close to terms with Norway's largest oil company to develop the field in the Flemish Pass, 500km north-east of St John's, the provincial capital.
“Statoil wants a deal. We want a deal,” the premier said after an industry speech in St John's. “I'm optimistic that we will be successful in reaching terms.”
Canadian media websites carried the video of his comments, which Reuters monitored.
Statoil declined to comment on the premier's remarks but said it would do so on Wednesday. The company has scheduled media interviews with Jez Averty, senior vice president of exploration for North America after a scheduled speech to the same industry conference.
“We're not immediately commenting but we'll be commenting tomorrow,” Statoil spokeswoman Alex Collins said.
Statoil and Husky Energy Inc announced in 2013 that the deepwater discovery could contain as much as much as 600 million barrels of crude, making it offshore Newfoundland's third-largest discovery.
A development timetable for the field has not been announced. Husky, which has a 35-percent stake in the field, has said it expects production to begin early in the next decade.
Bay du Nord would be Canada's fifth offshore oil project if it is developed and the first outside the Jeanne d'Arc Basin that lies about 350kms south-east of St John's.
The existing projects include the Hibernia field operated by Exxon Mobil Corporation, Suncor Energy’s Terra Nova and Husky's White Rose project.
Exxon is also leading the group developing the Hebron project, which will tap a 700-million-barrel field in the basin and is expected to begin production by the end of 2017, with output expected to peak at 150 000 bpd.
If a Bay du Nord project is approved by Newfoundland and its owners, oil production from Canada's offshore projects may begin to reverse years of declines. Production from the three existing projects averaged over 196 000 barrels per day in 2014, down from nearly 370 000 barrels per day in 2007.
Last September, Statoil postponed development of its 40 000 barrels per day Corner oil sands project in Alberta for at least three years, citing rising costs and limited pipeline space.
Reuters