Grand Banks rig costs shared by 3 firms

Three companies seeking new oil reserves off Newfoundland have agreed to share the operating costs of a deepsea rig.

Husky Energy, Statoil Canada and Suncor Energy have agreed to share the mobile rig Henry Goodrich over a three-year period beginning this November.

All three companies are already heavily invested in the offshore oil industry based on the Grand Banks, southeast of St. John's.

The Newfoundland and Labrador Oil and Gas Industries Association (NOIA) said the agreement bodes well for the industry, which has three fields in production, and a fourth now in development.

"Co-operation on rig sharing reduces exploration cost by eliminating the need to mobilize a rig multiple times for individual company needs," NOIA president Robert Cadigan said in a statement.

"This agreement is proof that operators offshore Newfoundland & Labrador are serious about increasing exploration in hopes of sustaining development well into the future."

The Henry Goodrich has often been used in the provincial offshore industry, and is well regarded for deepsea work in the harsh north Atlantic.

NOIA said the three-way agreement includes two additional one-year renewal options.