Desire Petroleum optimistc about oil rig availability
Speaking to local shareholders in Desire Petroleum plc at a meeting in Stanley on Monday evening, Chairman Dr Colin Phipps said that he was more optimistic than he had been for a long time about the company's prospects of finding oil in commercial quantities in the North Falkland Basin.
High oil prices since the last Falklands drilling campaign in 1998 had led to a global concentration on production and an associated increased demand for oil platforms, which had limited rig availability and pushed daily rates out of the reach of exploration companies like Desire. Dr Phipps said that increased rig production in response to demand and a tendency for rig producers to tie oil companies to long contracts, which in some cases they could not fulfil, seemed to have led to an increase in rig availability in the last six months, with the expectation also that daily rates, currently as high as $US 450,000, would fall significantly. While the wait to begin drilling had been frustrating for the company, Dr Phipps assured the thirty or so shareholders present that the time had not been wasted. Much additional geological and geophysical work had been done on the licensed areas, which had resulted in the identification of more drilling prospects and a significant de-risking of several of its existing prospects. Interest in Desire's licences continues to be shown by potential partners, said Dr Phipps, but the Board did not discount the possibility of drilling independently if a rig should become available which was fundable from the company's own resources. In either case, Desire would go into a drilling campaign better prepared than ever before. Colin Phipps, accompanied by fellow directors, Ian Duncan and Stephen Phipps, is in the Falklands for a meeting of the Falklands Joint Operators Group. This group, which is made up of representatives of all the companies currently involved in exploration for hydrocarbons in the waters around the Falkland Islands, usually meets in London every two or three months. The meeting in the Falklands is the first to have taken place for several years.