Equinor’s ‘very high risk’ Canada exploration well disappoints

Equinor’s hopes of making a big oil discovery with its “high-risk” Sitka exploration well offshore eastern Canada have been dashed, with the company revealing it to be a non-commercial discovery.

Sitka was the company's first probe in a two-well exploration campaign in Newfoundland & Labrador's Flemish Pass basin, with the goal of boosting reserves at the delayed Bay du Nord project.

For Equinor, it was third time unlucky, after two earlier attempts to drill Sitka were thwarted by technical issues.

Philippe Francois Mathieu, Equinor’s head of international E&P, told Upstream last month that Sitka was a “very high risk” well, but showed the company’s commitment to the province, despite the furore caused locally in June 2023 when it suspended work on Bay du Nord for cost reasons.

Equinor said the the Sitka C-02 probe did reveal hydrocarbons, and is currently classified as a technical discovery, albeit one that is not commercially viable.

Odfjell’s semi-submersible drillign rig Hercules is now finishing up operations at the drill site in in 850 metres of water, before mobilising to drill an exploration well on a prospect called Cappahayden South in 900 metres of water.

"The Flemish Pass is a complex area,” highlighted Tore Loseth, country manager for Equinor Canada.

“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 optimise the development.”

Equinor said that with five discoveries already in the Flemish Pass basin — including Bay du Nord, Baccalieu, Cambriol and Cappahayden — the wider Bay du Nord area demonstrates “significant” near field prospectivity.

This means that if Sitka, for example, had been a success, it could have been developed as a subsea satellite to the planned floating production, storage and offloading vessel at Bay du Nord

“Once the initial Bay du Nord infrastructure is established, future tiebacks will not only extend the field’s life but also maximise benefits for the province,” Loseth said.

“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.”