* May return to prospects in 2015
* Could add NOK 1-3 to value of Statoil shares
* Biggest Statoil-operated find outside Norway
* Shares up 1.2 crowns
By Balazs Koranyi and Henrik Stolen
OSLO, Sept 26 Norway's Statoil ASA has
made its biggest oil discovery beyond Norway in the seas off
Canada's East Coast and said the region could become a major oil
producer after 2020.
The latest find, in the Bay du Nord field of the Atlantic
Ocean, northeast of the city of St. John's, Newfoundland, is
near two previous Statoil discoveries. Statoil said it expects
to return to the field in 2015 with more wells as it has already
identified more potential for oil.
In a venture with Canadian partner Husky Energy Inc
, state-controlled Statoil said it had found between 300
million and 600 million barrels of recoverable oil about 500
kilometres (300 miles) off the coast of the Canadian province of
Newfoundland and Labrador.
"This is the biggest Statoil-operated oil discovery outside
Norway, so it's a pretty big day for us," Statoil exploration
chief Tim Dodson said on Thursday.
There are currently three major oil projects off the
Newfoundland coast: Hibernia, Terra Nova and White Rose. All are
located in the Jeanne d'Arc Basin, 350km (200 miles) southeast
of St John's. In total, they produced around 197,000 barrels per
day last year, and a fourth development, Hebron, is scheduled to
start operating in 2017.
While the latest Statoil find is a significant discovery for
offshore Canada, it pales in comparison with output from the
country's oil sands, in Alberta, where production is forecast to
hit 5.2 million barrels a day by 2030.
Statoil, once a domestic focused explorer, has expanded
rapidly over the past decade and recently made big discoveries
in Brazil, Tanzania, the North Sea and the Norwegian Arctic.
The Bay du Nord discovery is in addition to the nearby
Mizzen find, which could contain up to 200 million barrels of
recoverable oil, and the Harpoon discovery, which still needs to
Analysts said the latest discovery could add between 1 and 3
crowns to the Statoil share price, which would raise the
company's market value by between $530 million and $1.59
"This is an area with relatively favorable tax conditions
and although there is deep water, I think this might be worth
about 4 dollars per barrel and in excess of 2 Norwegian crowns
per Statoil share," said Anne Gjoeen, an oil sector analyst at
Analysts at Deutsche Bank valued the discovery at 3 crowns a
share with potential upside.
The stock was up 1.2 crowns, or 0.9 percent, at 138.0 at
0931 GMT, outperforming a 0.1 percent fall in the European oil
and gas sector.
The stock has gained 6 percent over the past month, the most
among European majors, according to Thomson Reuters data.
Statoil will need more time to evaluate the discovery and
its efforts could be slowed by ice conditions in the area. "Rig
availability is an issue here as there are only certain rigs
which can perform this activity," Dodson said.
Icebergs are an added difficulty, and Statoil must be
prepared to locate and tow them away from drilling platforms.
Dodson added that once Statoil returns, it would drill two
or three wells and given rig availability that may not happen
before 2015. The company's licences are spread over 8,500 square
kilometres in an area called the Flemish Pass, where Statoil is
the only operator.
"The Flemish Pass has the potential to become a core
producing area for Statoil post-2020," Dodson added.
The company aims to lift its daily output to more than 2.5
million barrels of oil equivalents a day by 2020 from a current
Statoil operates all three of the Canadian licences and
holds a 65 percent stake, while Husky Energy Inc has a
35 percent interest.
"Together, these discoveries confirm significant opportunity
in the Flemish Pass Basin and could be developed in tandem.
Husky and Statoil will continue to evaluate the potential for
commercial development of the discovered resources," Husky
Energy said in a statement.
Husky's shares were last up more than 1 percent at C$30.12
on the Toronto Stock Exchange.