Falkland Islands Government The Department of Mineral Resources Stanley Falkland Islands Telephone: (+500) 27322 Facsimile: (+500) 27321 E-mail: mailto:oil.fig@horizon.co.fk
February 2001
Offshore Oil Exploration
Licensed Acreage
The Falkland Islands Government issued seven offshore Production Licences to five consortia in October 1996. The licensed tranches are situated in the Falkland Islands Designated Area to the North of the Islands in the North Falkland Basin where water depths range from 150 to 500 metres and the distance from the shore is between 100 and 250 kilometres. The operators of the seven licensed areas committed to an exploration expenditure of over US$ 150 million during the first five year phase of the licences. This phase ends in November 2001.
The tranches are currently licensed to :
Tranche A Operator Argos Evergreen Ltd. (Initially Amerada Hess) Tranche B Operator Shell Petroleum Development Ltd., (Falklands Branch) Partners Agip Exploration B.V.
Tranche C, D Operator Desire Petroleum Ltd., (Initially Lasmo)
Tranche F Operator Sodra Petroleum B.V. (Parent company is Lundin Oil)
Partners Desire Petroleum Ltd
Tranche I, L Operator Desire Petroleum Ltd
Data Acquisition in the Area
Oil companies with well commitments in the North Falkland Basin embarked on a fast track exploration programme directly from the award of licences. From December 1996 to May 1997 over 7,000 km 2D seismic data was acquired over the area as well as 300 km 3D seismic data and 11,452 km aeromagnetic data. Approximately 2,400 km 2D seismic data was acquired in the third quarter of 1998. Sixteen site surveys were conducted before drilling began and a comprehensive metocean study of the area continued from June 1997 to the end of the drilling programme in late November 1998.
More recently, Lundin Oil, for Sodra Petroleum, acquire a further 2000km of 2D seismic data in the North Falkland Basin using a Veritas survey vessel. The survey was completed in under three weeks in January 2001. These data will increase the geological understanding of the area and assist with identifying new drilling targets.
Falklands Offshore Sharing Agreement (FOSA)
By mid 1997 the companies intending to drill in the North Falkland Basin had agreed to pool resources and share a drilling rig. Amerada Hess, Shell, Lasmo and IPC (or Sodra Petroleum) formed an alliance named FOSA and a number of working groups were established in preparation for drilling. Working groups managed rig and vessel procurement, onshore logistics in the Islands, environmental issues, fixed wing and helicopter support, telecommunications and metocean and well site surveys.
The FOSA structure proved to be highly successful from both an industry and government point of view. Financial savings were made by consortia while the Falkland Islands Government only had to confer with one group over exploration issues. As a result impact during the exploration drilling programme on the tiny Falklands community was kept to a minimum. Furthermore, port, storage and transit facilities for rig crews in the Islands served the industry well.
Logistics Support for the Drilling Programme
FOSA considered a range of options for logistics support during drilling and decided to operate from Stanley in the Falkland Islands. A joint venture company, Stanley/CSM was awarded a contract to provide services in Stanley for the movement and supply of equipment to the drilling platform. Bristow Helicopters provided transport for rig workers to and from the rig using S-61N aircraft while JET AIR were contracted to fly employees on a Boeing 747 S.P. aircraft from Stansted Airport in the United Kingdom to Mount Pleasant Airport every two weeks.
No more than twenty personnel were permanently employed by FOSA and Stanley/CSM during the drilling campaign. The work force comprised both locally employed, resident expatriate and short term expatriate staff. During crew changes up to 60 employees transited through the Islands.
Environmental Work
FOSA’s Environmental Working Group addressed the requirement for an Environmental Impact Assessment (EIA) with regard to the exploration drilling phase. The group also supervised benthic sampling at well sites including a repeat sampling after drilling. The EIA was made available to the public for comment and the Falkland Islands Government subjected the assessment to an external view.
The industry in conjunction with the Government established an Environmental Forum (Falkland Islands Exploration Production Environmental Forum; FIEPEF) chaired by Professor Alasdair McIntyre of Aberdeen University. Membership included representatives from the industry, Government and NGOs. The Forum made recommendations for both FOSA funds and later, Government funds, to be spent on environmental base-line monitoring and considered reports from FOSA’s Environmental Work Group on progress during the exploration programme. Funding from various sources has been found to continue this valuable work for a further year including seabird and cetacean monitoring offshore and penguin satellite tracking.
A two day environmental conference organised by Dr Mike Osborne of METOC (Consultant for IPC) was held in London in June 2000. Speakers presented a wide range of papers on their research in the South Atlantic in relation to oil exploration. Papers will be published in an environmental journal later this year.
Falkland Islands Government : Regulation of the Offshore Exploration Programme
The Falkland Islands Government Department of Mineral Resources was established at the time of the award of licences. In order to implement the licensing regime effectively expert advice is required to assist the local office. British Geological Survey, who were contracted to assist the Government to establish a licensing regime, continue to act as consultants with regard to the geological assessment of the data acquired from the exploration programme. In addition, the Health and Safety Executive of the United Kingdom have provided advice on legislation, safety case approval and well designs as well as inspection of platforms. Dunstaffnage Marine Laboratory in Scotland have advised the Government on environmental matters.
Drilling Wells
Amerada Hess signed a three year rig contract with Norwegian - based Dolphin Drilling Ltd., for the Borgny Dolphin. The rig, an enhanced Aker H3 design, received the necessary upgrades to enable it to drill in water depths of up to 500 metres before being towed to the South Atlantic. The rig arrived in Falklands’ waters in mid April 1998 after a 74 day tow.
Drilling began on 27 April and it soon became evident that wells could be drilled much faster in the North Falkland Basin than the initial conservative estimate of 60/70 days. Good technical support, reasonably straight forward drilling conditions and benign winter weather contributed to the speed of the drilling programme. Towards the end of the campaign wells were being successfully drilled in less than 30 days.
Wells drilled in the North Falkland Basin
Company Well Number Spud Date Oil/Gas Classification Shows
Amerada Hess 14/09-1 (Little Blue) 27/04/98 Yes Dry Well Lasmo 14/13-1 (Minke) 06/06/98 No Dry Well Shell 14/05-1A (Sebald) 05/07/98 Yes Dry Well IPC (Sodra) 14/24-1 (Braela) 16/09/98 Yes Dry Well Amerada Hess 14/09-2 (Galapagos) 13/10/98 Yes Dry Well Shell 14/10-1 (Fitzroy) 01/11/98 Yes Dry Well
On completion of the six exploration wells, in November 1998, the rig left the area to drill a well for Total in Argentine waters. Review of Hydrocarbon Potential in the North Falklands Basin after the First Exploration Drilling Phase
Data from the six wells drilled in the North Falkland Basin during 1998 were analysed by the oil companies and British Geological Survey (BGS) during 1999. Although none of the wells found commercially viable accumulations of oil, five of the six did find minor quantities of oil, and several also had evidence of gas : one of the wells flowed live oil to surface.
The drilling data has revealed the presence of a rich organic source rock, the necessary prerequisite for any oil to be formed in the area. Recent calculations by BGS and Shell indicate that this organic-rich source rock has probably formed up to 60 billion barrels of oil within the North Falkland Basin.
Although large accumulations of oil were not found by the first six wells, BGS suggests that this is because all the wells targeted potential oil fields above the source rock, whereas new geological modelling suggests that it would be better to look beneath the source rock.
Opportunities for Oil Companies to Explore in Falklands Waters
The Falkland Islands Government has recently introduced a policy, known as Open Door Licensing, accepting bids from oil companies on a monthly basis for unlicensed acreage. Production licences are awarded in relation to the required criteria set out in Offshore Petroleum (Licensing) Regulations 2000. Copies of the Regulations and guidelines for companies can be obtained from the Department of Mineral Resources.
In addition to licence awards for new acreage licence holders in the North Falkland Basin, are seeking farm-in partners in order to embark on a second drilling phase. Contact addresses can also be obtained from the Minerals Department.
Special Co-operation Area (SCA)
Under the Joint Declaration on Co-operation over offshore activities in the South West Atlantic signed by the UK and Argentine Governments in September 1995, an area to the South West of the Islands has been set aside as an area of Special Co-operation. The Special Co-operation Area is administered by a Joint Commission composed of delegations from the UK and Argentine Governments with officials from the Falkland Islands Government participating on the UK side. The Joint Commission has met twice a year and a Sub-Committee, charged with co-ordinating activities in the Special Co-operation Area, meets at more frequent intervals.
Details regarding offshore oil exploration in Falklands’ waters can be obtained from The Department of Mineral Resources, Stanley, Falkland Islands (Tel: 500 27322 Fax: 500 27321 e-mail mailto:oil.fig@horizon.co.fk) and British Geological Survey, Murchison House, West Mains Road, Edinburgh EH9 3LA, Scotland. (Tel: +44 131 667 1000 Fax: +44 131 668 2683 e- mail mailto:pcr@bgs.ac.uk) Also view web sites: falklands.gov.fk and bgs.ac.uk |
