Equinor to continue exploration offshore Newfoundland after Sitka deemed non-commercial

Equinor Canada Ltd. and partner bp plc will move to the Cappahayden South prospect after completion of the Sitka well offshore Newfoundland revealed hydrocarbons, but is “currently classified as a technical discovery and is not commercially viable,” the company confirmed to Oil & Gas Journal Sept. 6.

The wells, drilled by the SFL Corp. Ltd.-owned, Odfjell-operated semi-submersible drilling rig Hercules, are sited about 500 km east of St. John’s, Newfoundland and Labrador. The Sitka prospect sits in water depth of about 850 m and Cappahayden South lies in water depth of 900 m.

“The Flemish Pass is a complex area,” said Tore Løseth, country manager for Equinor Canada, in a release to local media provided to Oil & Gas Journal. 

“Although Sitka and Cappahayden South are not part of the Bay du Nord business case, each well drilled in proximity to Bay du Nord provides invaluable data. This data enhances our understanding of the resource potential and helps us optimize the development,” Løseth continued.

Flemish Pass basin oil discoveries

Equinor has been active in Canada since 1996 and is operator of the Bay du Nord development project, which has demonstrated “significant near field prospectivity” with five discoveries in the Flemish Pass basin, Equinor said.

The first discovery, Mizzen, was made in 2009. The Harpoon light hydrocarbon discovery was made in 2013, as was Bay du Nord, which is estimated to hold 300 million bbl of light high-quality oil. In 2016, about 15 km from the Bay du Nord discovery, the company found light high-quality oil at Baccalieu. The Cappahayden and Cambriol discoveries were made in 2020, about 500 km east of St. John’s, Newf. (OGJ Online, Oct 29, 2020).  

The basin offers Jurassic reservoirs with high porosity, high permeability, and mature source rocks, with geology similar to findings in the Norwegian Continental Shelf, Equinor has said.

“Once the initial Bay du Nord infrastructure is established, future tiebacks will not only extend the field’s life but also maximize benefits for the province,” Løseth said in the Sept. 5 release. “Since the postponement of the project last year, our priority continues to be to improve the economics and present a business case that supports the initial investment.”

Last year the company shelved its Bay du Nord deepwater oil project “following changing market conditions and subsequent high cost-inflation,” and said it would continue to assess exploration drilling around the field in 2024 (OGJ Online, June 15, 2023).