Oil play in the making? Sale of survey data another indication of Flemish Pass potential

In another sign of the growing interest in deepwater exploration in offshore Newfoundland, a Norwegian surveycompany reported this week that a "major oil player" is spending millions to acquire some of its3D electromagnetic data for the Flemish Pass Basin.

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Electromagnetic Geoservices ASA, also known asEMGS, carried out what's known as acontrolled source electromagnetic program in the Flemish Pass in 2014, in the now familiar areas known as Bay du Nord, Harpoon and Mizzen.

In simple terms, this data, in conjunction with seismic data, isused to indicate the presence and quantity of hydrocarbons such as oil, and the data is often used by companies toexplore leads, rank prospects and drill better wells.

Earlier this week, EMGS announced it hadentered into a US $3.9-million data licensing agreement for its Flemish Pass Basin library with an undisclosed oil company.

But CBC News has confirmed that Statoilis the company that acquired the data.

"Licencing existing data from multi-client providers is part of our ongoing evaluation of offshore Newfoundland and is standard business practice for exploration," a Statoil spokesperson wrote in a statement.

Statoil is leading the charge of a handful of well-known oil playersto develop a producing field in the Flemish Pass, and just wrapped up one of the most comprehensive drilling and appraisal programs in Newfoundland's offshore since the1970s, using the semi-submersibleWest Hercules.

Statoilis expected to release more information on its drilling program early this summer, but sources are already saying the company will be back "within one to two yearsfor further drilling with a much larger scope of work."

Officials with Statoil have not confirmed this.

A breakthrough for EMGS

The survey data is being made available to Statoil this month, and"represents a breakthrough for the application of our technology in this region,"EMGS CEOChristiaanVermeijden said in a May 24 news release.

Vermeijden said the offshore basins of Newfoundland are largely under-explored and the use of 3D electromagnetic data will "aid companies in developing a better understanding of the basin's complex geological structures and its hydrocarbon potential."

• Statoilto reveal results of Flemish Pass drilling program this summer

Frontier basins such as the Flemish Pass and Orphan are being touted as the next major play for Newfoundland's offshore sector, but observers acknowledge it won't happen anytime soon.

"I believe there will be in 10 to 15 years' time," one industry insider stated when asked when a producing oil field might be operational in the Flemish Pass, located some 500 kilometres northeast of St. John's.

Late last year, the provincial government raved about a seismic study of 11 parcels of land up for bids in the Flemish Pass that show the potential for up to12 billions barrels of oil.

Then premier PaulDavis described the potential as "enormous" and said the results show that Newfoundland and Labrador is on its way to becoming a global energy giant.