StatoilHydro announces find of hydrocarbons off Newfoundland

The drilling rig Henry Goodrich did tests that will lead to an application for a significant discovery licence in the Flemish Pass basin, off Newfoundland. (StatoilHydro Canada)

A potentially important new discovery has been found well off the eastern coast of Newfoundland, StatoilHydro Canada said Wednesday.

In a statement, the company said "hydrocarbons were encountered" during deepwater drilling in an area about 500 kilometres east-northeast of St. John's.

The company did not elaborate on what exactly the crew aboard the drilling rig Henry Goodrich found, but said further study of well results is needed to assess the discovery.

It said, however, it will be applying to regulators for what's known as a significant discovery licence over the next few months.

StatoilHydro Canada was working in an area known as the Mizzen property, in a deepwater area called the Flemish Pass basin. The area has been relatively unexplored, and is far away from the three fields now in production at the Jeanne d'Arc basin, southeast of St. John's.

StatoilHydro Canada was working on the Mizzen property, about 500 kilometres east-northeast of St. John's. (CBC)

"The drilling operation, conducted at a water depth of 1,100 metres and during the heart of the North Atlantic winter storm season, was very challenging," StatoilHydro Canada vice-president Erik Abrahamsen said in the statement.

"We are very pleased with the way that the rig, its crew and the local supply community successfully met the challenges."

Although beyond Canada's limit of 200 nautical miles, the find falls within Canada's jurisdiction because it is under the continental shelf. Rights to the Mizzen property were awarded by the Canada-Newfoundland and Labrador Offshore Petroleum Board.

StatoilHydro Canada holds a 65 per cent interest in the Mizzen find. Husky Energy holds the remaining 35 per cent interest.

StatoilHydro Canada, which is affiliated with the Norway-based oil giant, has long been a player in the Newfoundland and Labrador oil industry. It is a minority partner in the Hibernia and Terra Nova fields, and holds a stake in the undeveloped Hebron field.