MercoPress. South Atlantic News Agency

Falklands: Visiting operators optimistic about oil

Snap picture of operatos in Stanley

“THERE is good potential to find significant volumes of oil and gas in the Falkland Islands.” That's the optimistic message from oil industry representatives who were in the Islands last week for a series of meetings with the government, private sector and military.

The men from Borders and Southern Petroleum, Rockhopper Petroleum, Desire Petroleum, Argos Resources and Falkland Oil and Gas Ltd (FOGL) hosted a public meeting in the Court and Council Chamber. Speaking on behalf of the group, Tim Bushell of FOGL, the company which announced an important farm-out agreement with resources giant BHP Billiton last week, said the Islands were not far from large "well proven" oil basins in South America and, therefore, their hopes of oil or gas finds are high. BHP has committed to drilling at least two wells for FOGL in the next three years. He spoke of the drilling round held in the late 1990s by some of the big name companies in the industry and said the companies now involved in exploration in the Islands were a new breed who work together. "It's becoming a common theme where small companies band together to form a consortium to charter a rig for a period. If you can share between operators it brings down the cost considerably." Each exploratory well requires around £15m in investment, Mr Bushell said, excluding the cost of mobilising the rig. Looking ahead, he outlined what the future may hold if oil or gas is discovered in commercial quantities. If oil is found, he said, floating production technology would most likely be used. "It is standard technology that would work in a remote environment like this and, in terms of impact to the Falklands, you would see people coming and going but you wouldn't see any onshore plant." The quickest this could be done after initially finding oil would be at least three years, he said: "So if we're drilling next year, realistically you're not going to see oil production until 2013/14." If gas is found, the timescale could be much longer and whether or not it is even exploited depends on how much is found. Mr Bushell explained: "If we find a lot – and we have to talk about trillions of cubic metres - then there is an option which involves bringing the gas onshore and having a plant to liquefy it then put it into ships to take up to the markets." He showed the meeting a picture of the Snohvit development in Norway, an environment similar to the Falklands, and commented: "That is what would be required if we have an LNG plant in the Falklands. "The time scale for this is much longer - it requires a lot more investment to build and you're probably talking ten years away, minimum, before you'd see something like this in the Falklands, even if we found gas next year." John Perry of environmental consultants RPC also briefly addressed the meeting on his company's role in carrying out Environmental Impact Assessments (EIA) and monitoring once drilling begins. The EIA is a recognised formal process for assessing the likely impact of operations on the environment, and doing as much as possible to mitigate and minimise those impacts. "Our job is to check that the drilling companies do what they have said they will do," he explained. Looking back on the week of meetings with the oil operators, Director of Mineral Resources Phyl Rendell said the Islands were now at an encouraging and challenging time with oil exploration. She commented: "As Tim Bushell said, we are now assured that there will be wells drilled within the next three years due to the willingness of BHP Billiton to invest here. "The oil operators at their joint meetings last week did not flag up any major concerns about managing a second drilling campaign from the Falkland Islands as facilities proved to be adequate in 1998 and many of those facilities have improved since then." Photo: (l-r) Bruce Farrer (Borders & Southern Petroleum), Dr. Howard Obee (Borders & Southern Petroleum), John Hogan(Argos Resources), Lewis Clifton (Desire Petroleum), Dr Ian Duncan (Desire Petroleum), Cllr Andrea Clausen, Dr Colin Phipps(Desire Petroleum), Sam Moody (Rockhopper Exploration), Tim Bushell (Falkland Oil & Gas Ltd), Dave Bodecott (Rockhopper Exploration), Stephen Luxton (Falkland Oil & Gas Ltd) & Stephen Phipps (Desire Petroleum) (PN)