By J. Brock (FINN)
Desire Petroleum Plc. announced in September that it planned to raise fresh capital to fund its own share of a 3D seismic survey of its tranches in the North Falkland Basin. According to a press release dated 23 September 2003, Desire Petroleum has designed a 1000 square km 3d seismic survey, to be carried out during the Austral Summer in the company’s 100% owned tranches "C" and "D," that were formerly operated by Lasmo. According to Desire, the planned seismic survey follows wide-spread discussions with farm-in partners, who have stressed the importance of 3D seismic in refining major drilling targets.
To help facilitate this, Dr. Phil Richards of British Geological Survey (BGS), the Falkland Islands Government’s consultants, has returned to the Falklands for a few days last week in order to update Government Officers on the work BGS has been doing. "(We want) to discuss what we are going to do next and examine the scenarios for future exploration," said Dr. Richards in an interview for FIBS.
He went on to say that he would be discussing some of the up and coming issues with Government Officials as well as trying to make appropriate plans for the next exploration stages after that. Indeed, BGS are helping identify companies that would be willing to help fund the operation, which is planned to start shortly after the new-year. British Geological Survey have identified a number of potential places to drill. And, Desire Petroleum are banking on the fact that due to the world-wide slowdown in offshore drilling activity, the costs of carrying out 3D seismic surveys have fallen sharply. Desire Petroleum are taking advantage of these cost reductions and are currently in serious discussions with potential partners.
The latest 3D seismic imaging techniques are needed to identify potential oil fields and achieving efficient recovery. Such information can be gained by using the old 2D technique, but that method was to closely space 2D lines that were acquired with a single streamer. That method took a considerable amount of time to complete and time in the oil business means lots of money. However, methods have been refined over the past two decades and new innovations mean an increase in the number of seismic streamers vessels can tow.
To put it bluntly, if Desire Petroleum gets any partners at all, efficient and accurate 3D work must be done. "We hope, with the new 3D Data that will be acquired next year, to better define the potential sizes and shapes of these oil fields, so we can better locate the actual drill locations. And, that’s important to do. When you recall that the cost of drilling a hole here is anything up to $30Million. That’s a considerable amount of money to spend." Continued Dr. Richards in the FIBS interview.
Newer survey vessels can tow up to 20 streamers that are between 3km and 5km in length and approximately 25m apart. Modern lateral deflection systems used along with the advanced technology increases the effectiveness of the new technology by providing the capability to make a blanket of sensors covering a pinpointed area. Some sources say that these sensors can cover an area up to 10sq. km.
And, what are Desire Petroleum with the help of British Geological Survey looking for? Dr. Richards puts things in perspective. "They are looking for on the seismic data are essentially buried mountains some 2 or 3 KM beneath the seabed. What the seismic data gives the oil companies and it gives us, is, if you like, a radar picture of the ground 2 or 3 KM below the seabed. And, hopefully, from that radar picture, we can identify the buried mountains, which are the places, if the oil is there at all, is likely to accumulate. And, then having identified those buried mountains on the seismic data then it more precisely locates the best places to drill," he told FIBS.
Unless the 3D survey is done, it won’t be worth the money or the effort to return to the North Falkland Basin to drill. The cost of bringing a rig down and back from the North Sea in 1998 was somewhere between $20Million and £50Million. Add to this the $10Million for each hole drilled, and at that time it was expensive. Now, with prices even higher, oil companies have every right to demand the best possible data before committing exploration funds. According to Dr. Richards, prices ranging from $30Million to $90Million to come back to the Falklands to drill means that it is wise to spend $10 to $12 Million first for the 3D survey.
The Desire Petroleum announcement ended approximately two years, speculation generated by Dr. Colin Phipps, who said that his Company, Phipps & Co, may want to farm out for partners to do exploratory drilling of at least three wells in the area. One radio item said that he wanted to bring a rig down from Brazil. Indeed, at the time it was thought that Dr. Colin Phipps would come to the Falklands in January 2002 to start the ball rolling. He turned up 18 months later and granted FINN an interview.
"We want to bring a rig from somewhere closer than the North Sea. The biggest single cost of the last drilling campaign was actually bringing the rig down. It cost $42 Million to bring Borgny Dolphin in and take it out – without it doing anything – without drilling a hole. One of the reasons that happened was because when the Mineral Resources Department was just beginning, they very much followed North Sea regulations. So, they wanted to have a rig, which has a "North Sea Safety Case." That means that all the health and safety issues on the rig were approved by the UK Government – HSE – in Aberdeen." He told FINN.
No doubt, the emergence of newer 3D seismic technologies and the high cost of bringing a rig to the Falklands, even from Brazil, made those potential partners think about spending the money on further data rather than dry holes. That’s persuasive thinking aided by the 6th sense. Now that a new geological model for the North Falkland Basin has identified a number of major prospects along the basin margins, the idea of expanding the area of the 3D survey is more attractive, not only for Desire but also for companies that it may acquire as partners. Further to this, the Board has said that three of these prospects have the potential to contain recoverable reserves of one billion barrels of oil, should suitable reservoir rocks be present.
Roll on the new-year and all that it will contain for this forthcoming 3D seismic survey. Desire’s 6th sense has paid off. All concerned have chosen the best way forward.