The Falklands: Prospects For Remote Oil Exploration Good Says Oil Chief
Falkland Islands News Network. May 8
By J. Brock (FINN)
Recently the Director of Mineral Resources, Mrs. Phyl Rendell, returned from the American Association of Petroleum Geologists (AAPG) convention in New Orleans, La. Her stand, which was also manned by Dr. Phil Richards of British Geological Survey was in the International section. And, like the other countries represented, the Falklands had a display stand. A brief run down of what occurred at the Convention was placed in the May/June Newsletter but FINN went along to the Mineral Resources Department to ask Mrs. Rendel some questions in detail.
FINN What are some of the lessons learned from attending these AAPG Conventions?
PR The most recent American Association of Petroleum Geologists Convention which we now traditionally go to was held in New Orleans in April, was again a very useful venue for us to learn from. I think the lessons learned were, how stiff the competition is world-wide. I keep reiterating that we attend these conventions and go into what's called the International section and we find 35 or even up to 40 other countries all looking for industry investment in their areas. But even though we may be in competition with those companies, we also learn a great deal from them as to how they are progressing and moving forward and the approaches they are taking with offshore hydrocarbon exploration.
We also learn a lot from the service industry that exhibits at these conventions. They take up the majority of the room there and have enormous stands and we learn a lot about seismic surveying and the latest technical approaches to survey and research. And, also there is a whole series of lectures going on in the margins of the convention and we can attend those if relevant. They are very technical and they usually pertain more to BGS Geologists rather than ourselves but, again, they are very useful. It's a two way street. We're giving information to the industry but really it's a big learning experience for us as well.
FINN Given what you learned at this particular convention, what do you feel would be the ranking of the Falklands Oil Industry against those other countries?
PR Ranking-wise, I think we have an attractive fiscal regime. We are attractive as a reliable British run Overseas Territory so there are many attractions for the industry to work in our area.
FINN What are things that may be considered to be draw-backs?
RP There are some issues that make the area less attractive in that we are in a very remote part of the world. There are not many facilities in the Islands to support an industry like this but we are able to demonstrate to the industry that the first exploration drilling phase was extremely successful technically. We as a Government haven't pushed that. It's the industry that worked here that have put out some very favourable reports. The FOSA alliance worked extremely well and they were very pleased with the way the facilities that were available in the Islands, how they worked for them. So, I think that's the down side for us, and of course, the relationship that we have with our neighbours and how that might effect them if they are operating in South America.
FINN Have you been able to use the Falklands participation on the Special Area of Co-operation to help allay those political fears?
PR Yes. That's really the essence of the Hydrocarbons Agreement and working with the Argentines to licence that area shows that both sides are mature enough to talk together and discuss and work forward. So, that is a helpful example to describe to the industry.
FINN There seems to be a lot of activity surrounding your very, very low key approach in the Open Door policy. Will there be in the short term or in the long term, increased activity as far as perhaps another licensing round or, for the time being, are you just going to keep the same pattern.
PR Certainly, we are not looking at a competitive licensing round other than the special area until such time as a discovery is made. We need more wells to be drilled. Instead, we have taken this approach of looking towards later in the year adopting Open Door Licensing and this is really industry driven where the industry come to the Government and ask to acquire data over this or that area. The industry want some exclusivity. They don't want data that somebody else can come and have the same patch, so to speak. So, we are adopting a system that the other countries that had been exhibiting at these conventions that this is probably the way to keep the door open to encourage industry to come to us and say what they would like to do. Once there is a discovery made in either the North Falkland Basin or wherever, then we would revert back to competitive Licensing where Government call the shots. Once you have a discovery then, of course, you are going to have the industry knocking on your door.
FINN Presumably, if there is a discovery, would it mean that a rig of some sort would come down, or is it envisaged to drill holes in the seabed using another method?
PR We always need a semi-submersible, or some other facility to drill holes so even when you have made a discovery you would still need a platform to continue to drill other appraisal wells and so on so the thing mushrooms somewhat. You wouldn't rely on just one discovery well. There must be some other wells drilled to see how deep the structure was that you penetrated and to assess the size of the field. A discovery would mean an escalation of platforms and facilities coming down here.
FINN Given that, do you have a time frame for this activity?
PR We are still at the stage where we haven't made a discovery so our job as a Government is to encourage the present license holders to find new partners to bring new cash to the area and carry on drilling exploration wells. We are hopeful that in 18 months to 2 years' time we should see more exploration wells being drilled. They may not be on the scale we saw in 1998 when we saw 6 wells being drilled back to back. It may be on a smaller scale and hopefully there will be rigs available from offshore Brazil that could come here and drill one or two wells and then, if from that exploration programme there was a discovery made, then we would expect the activity to increase. But the discovery well is still a very big "IF." That's what we are hoping for but it could be some time away.
With the world's second best source rock the prospects of finding something in the North Falkland Basin are quite high. However, experts say that it is the well that has commercial quantities of hydrocarbons in it that will start the ball rolling. |
