Equinor and its partner BP Canada have made two oil discoveries offshore Newfoundland and Labrador.
The two wells at the Cappahayden and Cambriol prospects, drilled this summer in the Flemish Pass Basin, have proven the presence of hydrocarbons; however, it is too early to provide specific information on volumes, Equinor said in a news release.
Equinor has a 60 per cent share in the partnership and BP Canada, 40 per cent.
"We are pleased to have made two discoveries offshore Newfoundland. The results are a testament to the hard work and dedication of our team, who have executed a safe campaign with positive results — particularly considering the unique challenges faced during the COVID-19 pandemic,” Equinor’s senior vice president for international offshore exploration Paul McCafferty said in a news release.
The wells, drilled by the semi-submersible drilling rig, Transocean Barents, are located about 500 kms east of St. John’s. The Cappahayden well has a water depth of about 1,000 metres and the Cambriol well has a depth of 600 metres, the company said.
Equinor was the operator for the wells. As part of the 2020 exploration campaign, Equinor has also drilled a top-hole at the Sitka prospect.
Equinor has been active in Canada for more than 20 years and operates three discoveries in the Flemish Pass Basin: Bay du Nord and Harpoon (discovered in 2013), and Mizzen (discovered in 2010), the news release noted.
The Newfoundland and Labrador Oil and Gas Industries Association (Noia) obviously welcomed the news.
“The announcement today by Equinor and partner BP Canada that oil has been discovered at the recently drilled Cappahayden and Cambriol wells in the Flemish Pass Basin is encouraging, at a time when encouraging news is needed for the Newfoundland and Labrador offshore oil and gas industry," Noia CEO Charlene Johnson said in a statement Thursday.
"Offshore exploration is imperative to the future of the industry and these successful wells further demonstrate the exceptional prospectivity of the Newfoundland and Labrador offshore. This announcement is welcomed by the membership of Noia and we look forward to further details about the wells being provided in the near future.”
In the House of Assembly Thursday, Premier Andrew Furey also celebrated the news.
"I congratulate the team who worked on this drill program. They successfully executed a safe campaign — even as they faced additional challenges during the COVID-19 pandemic," Furey said in a ministerial statement.
He also noted on Wednesday, the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) issued a significant discovery licence to Equinor based on the Harpoon O-85 exploration well.
"The two discoveries Equinor announced today along with the Harpoon significant discovery will potentially accelerate development of the Bay du Nord Project and bodes well for Newfoundland and Labrador’s offshore future," he said.
In separate news, Equinor announced it wrote off US$2.93 billion from the value of its assets after cutting its long-term oil and gas price forecasts on Thursday, betting the pandemic and a shift away from fossil fuels will have a lasting impact on markets.
The biggest hit came from a $1.38 billion write-off in the United States, most of it from the company's loss-making onshore shale oil and gas business, pushing Equinor to a net loss of $2.12 billion in the third quarter.
The Norwegian state-owned energy company saw profit before interest and tax (EBIT) fall by 70 per cent year over year to $780 million, lagging the $1.03 billion predicted in a poll of 24 analysts compiled by Equinor.
With files from Reuters
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