Falklands : Could a tight rig market delay Falklands drilling programme in 2010?
Submitted by Falkland Islands News Network (Juanita Brock) 29.09.2009 (Article Archived on 13.10.2009)
A buzz word – rig - permeates the Falklands exploration industry but it would be a tight rig market that could postpone Falklands exploratory drilling in the South and East Falkland Basins.
Could a tight rig market delay Falklands drilling programme in 2010?
By J. Brock (FINN)
A buzz word – rig - permeates the Falklands exploration industry but it would be a tight rig market that could postpone Falklands exploratory drilling in the South and East Falkland Basins.
Richard Liddell, Chairman of FOGL, has conformed that a rig has not been sourced for drilling in the deeper prospects that the company has in the area. He said, “"Our partner, BHP Billiton, continues to seek a suitable drilling rig for a drilling programme currently scheduled for 2010, in line with our previous guidance. With the necessary preparatory work completed and funds available to secure long lead drilling equipment, we are well placed to move into the next exciting phase of exploration."
We’re almost ready and everything’s there but the rig. One of the final hurdles – an environmental impact assessment is due to be submitted to the next meeting of Executive Council, scheduled to take place in early October. Once this is approved the South and East Falklands Basins are that much closer to the all important drilling round.
The rig market has been tight for several years now since the price of crude nearly hit $150.00 per barrel in 2008. Exploration companies signed contracts for extended periods of time and even kept exploration rigs for production. A few rigs have come on to the market but they are not suitable for the prospects to be drilled to the south and east of the Falklands where water depths are more than 1,000 Metres deeper than they are in the North Falklands Basin.
The best option is to get a rig or drill ship that is fit for purpose. BHP Billiton will make sure this is the case. Newer rigs on the market can do the work but it is an expensive option with prices of $500,000.00 to 750,000.00 per day (approximately) for drill ships and newer adapted rigs.
Fewer rigs have been constructed in the past few years. Those that were constructed were snapped up by exploration companies while still being constructed.
It is expected that the right rig or drill ship will be in operation in FOGL’s prospects in 2010 but in this business delays – sometimes long ones – happen regularly.
Our ear’s to the ground. Watch this space.
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