Optimism in evidence in hunt for Falklands oil - Offshore Oil Journal
published by Aberdeen Press & Journal, November 22
by Jeremy Cresswell
Does oil exist in abundance offshore the Falkland Islands, or does it not?
Evidence is mounting that it does. The challenge is to locate the prize. Both Desire Petroleum and Westmount Energy have issued results statements in the past few weeks that sketch a tantalising picture of what might exist in the North Falklands Basin.
And British Geological Survey has been prepared to stick its neck out by saying that the Falklands possess "incredibly rich" source rock and that the North Falklands Basin alone could hold anywhere between 1 billion and 11 billion barrels of oil.
Oil company calculations suggest an even more extreme range, according to BGS - anything from 1 million to 100 billion barrels. "So you can see that there is a huge element of controversy here as to how much oil has been generated in the basin, (North Falklands)," said BGS geologist Phil Richards at a public meeting in the Falklands on October 6.
Crucially, he said of the region's geology : "It's probably the second best source rock known anywhere in the world - I can't overemphasise the importance of this." "It's such a good source rock that it's capable of generating so much oil that there will undoubtedly be increased enthusiasm for exploring this basin in the future."
Mr. Richards said the first Falklands drilling campaign, started late last year, had been a success.
Five out of the six wells drilled experienced hydrocarbon shows and one of those wells flowed oil to the surface.
But they were clumped close together, with the exception of one, which was 50 miles off the main group. "Of course, it would have been nice to have huge discoveries in the first half-a-dozen wells, but we never thought that was a probability. You need to drill more than half-a-dozen wells in a basin this size." "You need to spread them about in a lot more places."
Mr. Richards went on to say that all first campaign wells tested the same type of exploration concept and target, not by design, but because many of the production companies did not talk to one another.
"I think, with only six wells drilled so far in the North Falklands Basin, we have still an awful lot to play for, an awful lot more to target and different types of targets to be addressed."
Mr. Richards suggested that, had the crucial source rock not been found with the six wells, it was highly likely that the Falklands would have been dumped.
"We have proved that there is a very good source rock in there, that there is a good reservoir, a good sponge capable of soaking up all the oil, and we've got plenty of oil and certainly a lot of gas."
"We found a lot from existing wells."
This statement confirms a story carried by The Press and Journal on August 8 last year, when we reported that the rig, Borgny Dolphin, had been experiencing a lot of gas kicks with Shell's first well, although others criticised the accuracy of our reporting at the time.
Shell's second well is the one that flowed oil to the surface. It is understood this was a medium-light grade crude.
Two oil companies central to the Falklands oil story - Westmount and Desire Petroleum - have sought to capitalise on the BGS disclosures. In its 1999 first-half results, Westmount, a major stakeholder in Desire, said earlier this month that planned licensing by the UK and Argentinian governments of acreage in the "special area of co-operation" and major drilling offshore Brazil could spur companies into planning a second campaign.
"These factors are likely to renew interest in the North Falklands Basin and to provide access to drilling rigs within reasonable distance and, hence, at more reasonable cost," said Westmount.
The company went on to say that Desire was studying detailed analysis of new seismic data acquired on Falklands tranches I and L and preliminary results of a technical study performed by Robertson Research International, which has confirmed the richness of the source rocks.
"Desire is currently studying where this oil may have accumulated with a view to identifying further drilling locations, and it intends to prepare farm-out brochures for tranches C, D, F, I and L and actively to seek new partners for further exploration in the North Falklands Basin."
Desire chairman Colin Phipps said Brazil held the key in so far as this would bring rigs to the Falklands doorstep.
The company would actively pursue farm-out partners starting early in the new year, he said.
Copied from Oily1 on the Desire Petroleum thread |
