Falklands : Oil Operators Complete Their Falklands Visit
Submitted by Falkland Islands News Network (Juanita Brock) 16.05.2009 (Article Archived on 30.05.2009)
Representatives from several oil exploration companies have spent a week in the Falklands presenting their Environmental Impact Assessment Reports as well as updating shareholders on progress towards exploratory drilling.
Photo (c) J. Brock (FINN) Sam Moody, Managing Director of Desire Petroleum, Stephen Phipps, Director of Desire Petroleum and john Hogan, Chief Executive of Argos Resources at the Department of Mineral Resources.
OIL OPERATORS COMPLETE THEIR FALKLANDS VISIT
By J. Brock (FINN)
Sam Moody, Managing Director of Desire Petroleum, Stephen Phipps, Director of Desire Petroleum and john Hogan, Chief Executive of Argos Resources at the Department of Mineral Resources.
Representatives from several oil exploration companies have spent a week in the Falklands presenting their Environmental Impact Assessment Reports as well as updating shareholders on progress towards exploratory drilling. On Thursday they had a brief meeting with the press to update them on what happened during the week.
They met with Officers from most of the Government Departments and a majority of the Councillors. “They have been extremely helpful and proactive,” said Desire Representative, Stephen Phipps.
Desire had a shareholders meeting open to approximately 200 local shareholders. Rockhopper Exploration presented their Environmental Impact Assessment Report on Monday night to a public gathering at the Chamber of Commerce and Desire Petroleum updated shareholders. A representative from ARGOS, Mr John Hogan, also visited the Falklands and met with people with relevant interest in the hydrocarbons industry.
“People were pleased and impressed with the amount of in-depth analysis that goes into the environmental process,” said Sam Moody, Managing Director of Rockhopper Exploration. “The Assessment is part of the process for drilling,” he continued.
A main issue discussed was rig security in that an entity needed to be identified to be responsible for that security. Stephen Phipps said that logistics also played a part in that the Falklands are a long way away and flights and accommodation needed to be arranged as well as facilities at FIPASS. It is routine but the distance makes logistics more difficult. John Hogan of ARGOS said that these arrangements were part of the routine and were not issues. Operators need to be clear about what Government and other agencies will do to support the exploratory drilling effort.
“The more meetings like this we have, the easier it makes it,” said Mr Hogan, “We don’t want to wait until the very last minute at the risk of finding there’s a gap in the coverage and the more things we can identify we can do prior to the round the better.”
In the North the Companies are hoping to work together and jointly they are actively seeking a drill rig. They are not quite sure when they will get one but things look more hopeful than they have done for a long time. Once acquired, the companies exploring in the North Falkland Basin would take it in turns. This includes the logistics around the rig – flights, supplies, etc. This is what happened during the 1997/98 drilling round.
Argos hasn’t presented any updated information because they haven’t decided yet. They expect to complete their mapping before the end of this year and then will have a view on the quality of the prospects through commercial thresholds and will act on any opportunities they see.
Mr Hogan explained that each company had its own exploration programme and interpretation programme so the time-scales will be different in completing all needed to begin exploratory drilling.
Desire Petroleum plan to drill 4 wells and Rockhopper Petroleum have a commitment to drill 2 wells but could opt for two more and could drill up to five wells – the maximum.
The economic down-turn won’t hurt Desire as they don’t produce any oil. When they secured a partnership with Arcadia, they decided not to look for any other partners. However, it is unknown whether people have been put off by the economic woes that have plagues the world economy.
“Actually, it could be helping because with the oil price coming down, exploration spending is coming down and therefore rigs will be cheaper, seismic vessels are becoming cheaper, so for those of us at the sharp end, who are explorers only, our cost base has come down,” said Mr Hogan.
Logistics plans for the exploratory drilling round have not been finalised as no one knows what kind of rig will be coming down and how many wells are to be drilled. Companies need to know what kit will be appropriate and when it is needed. The representatives said they can be equally comforted with South America or Africa as a continental touch point.
Small exploration companies expect, that if good quantities of oil are found, it would surprise the representatives if smaller companies aren’t gobbled up by bigger companies. They are not geared up to be production companies at the moment. In saying that, there is confidence that huge amounts of commercially viable hydrocarbons can be found in the North Falkland Basin.
Representatives would not be spending enormous amounts of money if they were not confident about commercially viable hydrocarbons reserves.
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