NEWS
09/20/2011 03:50 EDT | Updated 11/20/2011 05:12 EST

5,000 litres of oily mud spills at White Rose project in Newfoundland offshore

ST. JOHN'S, N.L. - An equipment malfunction on a drilling rig on the White Rose oilfield off Newfoundland caused 5,000 litres of oily mud to spill into the North Atlantic on Tuesday.

The Canada-Newfoundland and Labrador Offshore Petroleum Board issued a bulletin saying that Husky Energy (TSX:HSE) reported a spill of synthetic-based mud from the GSF Grand Banks rig.

Synthetic-based mud is a heavy fluid used during drilling for lubrication purposes and is a food-grade oil of low toxicity.

The board said the spill occurred while Husky Energy was conducting normal drilling operations at White Rose, located about 350 kilometres east of St. John's.

"It's a significant spill," said Sean Kelly, a spokesman for the board.

Kelly said Husky has launched an investigation, but the board could conduct one of its own if it concludes that probe is insufficient.

Colleen McConnell, a spokeswoman for Husky, said the spill occurred at about 9:30 a.m. after a shale shaker — a device that separates rock particles and sand from drilling fluids — stopped working, causing the muddy oil to spill into the sea.

"We started an investigation right away and drilling operations were immediately suspended and the source of the leak was quickly identified," she said from Husky offices in Calgary.

McConnell said the investigation would try to determine the cause of the equipment malfunction.

When asked if Husky would clean up the spill, McConnell said only that no sheen was detected on the surface and the company was monitoring the situation.

Kelly said the mud would coat the sea floor because of its density.

The spill is the second largest in the province's offshore this year, according to the board. In March, more than 26,000 litres of synthetic-based mud spilled from the Henry Goodrich drilling rig.

White Rose has been operating since 2005.