Falklands : What The Oil Industry Means to the Falklands
Submitted by Falkland Islands News Network (Juanita Brock) 09.03.2006 (Article Archived on 23.03.2006)
The BBC's Deborah Vogle quizzes Sam Moody of Rockhopper Exploration.
WHAT THE OIL INDUSTRY MEANS TO THE FALKLANDS
A Report for BBC World Service by Deborah Vogle (DV) 07/03/06
In a Radio 4 interview, when Cllr. Summers talked about strained relations with Argentina he mentioned problems over the disruption of the fishing and tourism industry and also into interference with Oil Exploration. But that hasn’t seemed to have affected Rockhopper Exploration’s latest seismic survey to the North of the Falkland Islands.
Using a new exploration technique, the survey’s just been successfully completed. The Company will spend the next three to four months analysing the data. Rockhopper’s Managing Director, Sam Moody (SM), has been talking to Ben Koen (BK) to tell him what the hopes are at this stage.
SM: We would argue that the whole of the Falklands exploration area represents, really, a major untested oil plane. And, a significant part of that clearly is in the North Falkland Basin. You have had six wells drilled, five of which had oil or gas shows, one had oil at the surface. So, in the North Falkland Basin you are exploring an area where a huge amount of work has already been done and which is a proven working hydrocarbons system. It could be a significant discovery if it comes in.
BK: Now, oil companies have come and gone from the area in the past – most recently one departed in 1999. Is the fact that they are back and showing interest again all to do with oil prices now?
SM: I think if you look at the oil price in 1998 when the last round of drilling happened, it was probably around the $10 $12 Dollar mark. Clearly it’s much higher today. It’s been nearer to $60.00. When you get a high oil price, it makes exploration in remote areas or exploration in areas in which it’s difficult to operate much more attractive because any discovery becomes significantly more valuable.
BK: How big an impact would you think this would have in the Islands?
SM: I don’t think it’s anything the Islands can’t handle. It’s been done before with very large companies being involved and I think it worked very smoothly. In terms of the impact of the actual drilling you only need to look at the Environmental Impact Assessment submitted by Desire (Petroleum) to understand how much work is being put in by the oil companies to ensure people understand what is going to happen. Were there a discovery, it would really be up to the Islanders to decide what would happen after that in terms of how much they allow to happen onshore and what they decide would happen offshore.
BK: Obviously oil prices can go down as well as up. How sure can you be that they will remain stable enough that this area can stay economically viable?
SM: I am not in the business of predicting oil prices but most commentators don’t seem to think it will fall back below the $35.00 to $40 a barrel range. And, at that sore of level in the relatively shallow waters of the North Falkland Basin, you do not need to find a huge accumulation to make it worthwhile. You could probably do it for somewhere in the region of 50Million Barrels, which is much smaller than a number of prospects we have mapped.
(100X Monitoring and Transcription Service)
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