The Falklands: Part 2 of the public meeting: Where Do We Go From Here
Recording And Transcript By J. Brock (Falkland Islands News Network)
DPR: I think what has to happen next is that we have to get new companies in to
explore and to kick-start the exploration from here; to encourage the existing
companies to spend more money, and possibly to bring new companies in to
form new partnerships with the existing companies, to bring new impetus. These
new companies are likely to be fairly small.
It is unlikely that we will get the big household name companies coming in at this
stage. Because exploration tends now-a-days, more so than ever, to be
conducted by the minnows, if you like. They are the small entrepreneurial
companies that make their money from high risk exploration in places such as this.
There are a lot of them out there. They just need to be made aware of the
opportunities. And, that?s something we will put a lot of effort into over the next
year or so.
We know that some of the existing players in the Basin may go. That?s not
necessarily a bad thing because it allows for change and for new blood. And, it?s
certainly not unusual. It?s not unusual to the extent that the Department of Trade
and Industry in the UK has just established a very expensive website to allow
companies to trade acreage, to trade licenses and to facilitate farmings to existing
relatives. It?s seen as the way forward to increase exploration, even in mature
areas. And, the companies are very happy that BGS and FIG help to promote
these opportunities and help them with enticing new companies into the area.
That, again, is something that we have put a lot of effort into over there for the
next year or so.
With that, I think I will hand back to Andrew.
Invitation For Questions By The Chief Executive, Mr. Andrew Gurr:
Thanks very much, Phil. We have somewhat over a half an hour for questions.
There are 22 potential questions here in the Hall, three people to answer. Who is
going to start?
Q1 P2 : On a slide giving the average source of rock values and there was an
?HI? figure. What does it mean? (The first slide giving the average source of rock
values.)
PDR HI stands for hydrocarbon index and it?s basically a measurement of the
amount of hydrocarbon value in the source rock. There are all sorts of numbers
that you can use to illustrate the hydrocarbon potential resource. HI is one, the
maximum temperature that the source rock has been subjected to is another. You
can compare all of these figures. The most popular one is a figure called the S.P.I.
which is the Source Potential Index. Like many of these figures it?s a fairly
arbitrary figure. It is arrived at by multiplying the thickness of the source rock by
the percentage of organic carbon in it by the amount of oil that a ton of the rock
can generate. I didn?t show those figures. But, the Yunga Basin in Southern
China, which is the most prolific source rock in the world, has an SPI value of 65.
The North Falkland Basin has an SPI value of about 61 and the main source rock
in the North Sea, which as you know has produced an awful lot of oil, has an SPI
value of only 15, which gives you an indication of how rich this source rock really
is.
Q2 P2: When the Seismic was shot, at what depth was it shot and by whom?
DPR there is a lot of seismic data existing in the basin now. The first of it was
acquired back in the late 70s by two companies who acquired it on a speculative
basis in the hope that they would then be able to sell the data on. Something
happened in 1982 that prevented them from making much money from those
surveys. But, the first thing that we did when we became involved in the
exploration effort here in 1992, was to insure that more seismic data was
acquired.
We brought a couple of seismic companies to acquire data then and the first thing
that the oil companies did on taking up the licences was to acquire yet more
seismic data. They all shot their own data using various sub-contractors. So, there
were four or five sub-contractor seismic companies working in the area. The data
was acquired in water depths ranging from about 100 metres to about 3,000
metres and the seismic data goes down to about 7 or 8 Kilometres down into the
crust.
Now, having said that, the data is best and most easily interpreted in the top 2 or
3 Kilometres. And, the quality is quite good in the lower parts of the crust.
Q3 P2: Why do we need a mineral resources Department?
Answer by the Director of the Mineral Resources Department, Mrs. Phyl Rendell
(PR):
I don?t know if I am the right person to answer that. I should declare an interest.
Seriously, I think that it is Government policy, Councillors set the policy that this
Government policy is to pursue and search for hydrocarbons. A lot of money,
probably in the range of œ5 Million has been spent so far by the Falkland Islands
Government to facilitate the industry, to come into the area, writing legislation and
preparing all the regulations and putting them into force with the regulatory bodies
to oversee the exploration last year was a huge commitment on the part of FIG.
As we are advised by BGS and other oil companies and the Department of
Trade and Industry, you don?t just walk away when you don?t have success at
the very beginning. So, we have always been in for the long haul. Councillors are
committed to that long hall. We are a pretty lean and mean machine in the
Department of Mineral Resources. We are three people. We very much rely on
the expertise of BGS and we are there to promote the good data that?s been
acquired to try and do our bit to encourage new companies to come into the
area. In addition to the offshore, we do take responsibility for the onshore mining
licensing.
Q4 P2: Would it not also be true to say that your income in terms of license fees
is greater than your expenditure in terms of manning the Department?
PR That?s true. The companies, perhaps people don?t appreciate this with the rig
leaving, the companies still have an interest. They have licenses and they pay
acreage rental. That acreage rental, at the moment, is more than our running
costs.
Q5 P2: Why is it that there is such an enormous variation in the estimates with
regard to the amount of oil made by the different companies?
DPR From less than a million to more than 100 Billion, yes. A small part of the
reason is that all professional Geologists have different opinions of the way the
world works. That?s one element. But, that doesn?t account for the huge
difference that I have outlined. The main reason for the great variation in figures is
that the figures are based on the data available to the individual companies. They
drill their own wells. They share well information to some extent but they didn?t
share all of the information and the information available to some leaves them to
believe that only 1 Million or so barrels was generated whereas the more
extensive, very much more extensive data sets available to others, particularly to
Shell, who have put correspondingly more effort in analysing those data sets
afterwards, suggests that they are towards the high end of the figure. I think that?s
the large part of the reasoning. If you have more data, you are able to make a
better guess as to the amount. It?s like having a book with 75% of the pages
pulled out. You could not appreciate what the story was about but if you got the
whole book, then you have a much better understanding of what the story was
about. So, to the ones with more data predict a larger field.
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