Oil Operators Planned Pull Out Of The Falklands - But Shell hasn't given up hope
A report For Calling The Falklands By David Wood (DW) 27/08/99
Falkland Islands News Network, September 2
Planned Pull Out Of Oil Companies Is Expected
There have been many rumours and counter-rumours in the past couple of weeks
about oil exploration companies leaving Falklands waters. Earlier this week a
press agency claimed that Shell, Lasmo, and Amerada Hess are all abandoning
any plans to return to the Falklands. However, a spokesman for Shell has told
this programme that the Company is not abandoning the area and that it hasn't
given up hope of an oil find. Amerada Hess said in May that it would be halting its
exploration and earlier today, Tim Bushell (TB) of Lasmo confirmed that the
company had applied to pull out of its "C" and "D" Tranches.
TB It really depends on the Government to decide whether they can sanction the
withdrawal and in the event that we do then the Company, Desire would
probably take over our equity position in those licenses and, indeed, take over
the operatorship of those two blocks at the same time.
DW And by withdrawing, is that withdrawing for good?
TB Our current feeling is that we, as you know, participated in a seven well
drilling campaign last year. I think the results were, best say, mixed. We had
some encouragement but overall, we didn't find the large oil accumulation that we
went down there to look for in the first place. So, although, I suspect it is unlikely
that we would return to the Islands, you never know. If someone else is lucky
enough to find oil in quantities greater than we think are there then we may come
back again.
DW Now, obviously you will be disappointed by this but are you particularly
surprised?
TB I'm not particularly surprised. I think we always stressed that the risk of
finding commercial quantities of oil were something like one in ten so this was the
most likely result. I am personally disappointed because we very much enjoyed
working in the Islands. We got a lot of support from both the Government and
from the people there. It was a very good operation and so disappointment all
around that it didn't work out but I guess, in a business way, we have to get used
to that kind of failure.
DW You've nothing else then. Has it been an interesting exercise for you?
TB It has been very interesting. It was a good example of Oil Companies getting
together to collaborate on a project. That doesn't rather surprisingly happen not
to so much of a degree that it did in the Falklands. We are already talking about
using that model elsewhere in the world where we are exploring so there were a
lot of good lessons coming out of it. I think as well the work we did on the
environmental impact of our operations down there, working with the local
authorities, the interest groups and the environmental people in the Falklands was
very good as well. In fact, we are very proud of the activities there.
DW Even though you are pulling out, what's in it for Desire to stay there?
TB We know that there is oil around in the sub-surface down there. Our own
view is that it is not enough to be economic for a Company of Lasmo's size but a
much smaller company like Desire could certainly, if they, have a bit of success to
turn that into a small economic prospect and its something that for them is worth
staying. Also, Lasmo has other projects around the world and the Falklands have
to be ranked with what we have been doing elsewhere. It's just unfortunate they
fell off the bottom. Other companies might find it more interesting and are excited
to go and explore there, so Desire just may be just one of a number of companies
that you see exploring as part of what might be a second wave of interest down
there in the next few years.
DW So, If You are one of the Falkland Islands' Desire Shareholders, you
wouldn't give up hope?
TB No. I wouldn't actually. I think Dr. Phipps is keen to continue down there and
he needs some encouragement from the world. It wasn't a total write-off by any
means. There is enough encouragement to give people the will to carry on I think.
It's worth staying in there, really.
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