Falklands government is upbeat: "We are still very much on track with offshore oil"
UK blocks well in Falklands retreat - Ministry gives last-minute drill plan thumbs down
Upstream, Friday November 27
-CHRISTOPHER HOPSON from London -
THE UK Department of Trade and Industry has rejected an application by Lundin Oil and Desire Petroleum to farm into Lasmo's acreage off the Falklands in the hope of drilling a last-minute well. The semi-submersible Borgny Dolphin, which has been drilling off the Falklands since late April, is due to leave in the next week after sinking six wells with only modest results.
It is understood that the two smaller players were interested in the possibility of drilling a new prospect identified by Lasmo in tranche C before the rig leaves. Lasmo is believed to be looking to wind down its involvement off the islands.
Sources indicated that the DTI, which advises the Falkland Islands government on oil matters, argued that Lundin had not spent enough time evaluating the current data from the North Falkland basin, taken from the initial wells. Lundin and Desire are keen to keep the Falklands flame alive by putting another consortium together to drill, maybe next year. However, the larger operators appear much less keen to embark on any more drilling off the islands.
"The feeling between us and Desire is that we will finish our re-evaluation work in the first quarter of next year and then by mid-year be in a position to discuss our options for further drilling," said a senior exploration source at Lundin Oil.
British independent Desire agreed that weak oil prices were likely to delay any further drilling despite signs that there could be hydrocarbon reserves in the area. "Desire believes that further exploration drilling is justified.
Unfortunately, the present historically-low level of oil prices is inhibiting the willingness of many oil companies to carry out exploration. "It is, therefore, likely there will be a lull in further drilling in the North Falkland basin until such time as oil prices recover to a level sufficient to make it attractive again," the company added.
Royal Dutch/Shell last week abandoned its second and last well off the Falklands, Fitzroy-1, after encountering several intervals with hydrocarbon indications but not in commercial quantities. Phyllis Rendell, director of mineral resources for the Falkland Islands government, was upbeat despite the disappointing results. "We were never expecting a discovery in the first six wells. That would have been an added bonus. We are still very much on track with offshore oil," she contended. |
