MercoPress. South Atlantic News Agency

Falkland Islands: Oil activities still remain encouraging

Director of Mineral Resources Phyl Rendell

THE offshore oil drilling rig Ocean Guardian continues its work at Rockhopper Exploration’s Sea Lion well, where hydrocarbons were encountered earlier this year. The well at that time was suspended for re-entry and testing.

Director of Mineral Resources Phyl Rendell said the current programme included re-entering the well, drilling through cement cores, locating the hydrocarbon intervals and testing before the well would be permanently plugged and abandoned.
The activities are expected to last between 25 to 35 days.

Mrs Rendell said the actual flaring of carbons was likely to last less than 48 hours.

While she described recent activities as “encouraging steps” she said there was no guarantee that the well would produce commercial hydrocarbons until more appraisal wells were drilled and further analysis carried out over the following months and years, to establish the economic viability of the field.

After the drill stem test on the Sea Lion prospect, Ocean Guardian will be contracted by Desire Petroleum to drill at their Rachel structure, which is located south of Sea Lion in licence PL004. Desire Petroleum director Ian Duncan and chairman Stephen Phipps plan to visit the Falklands at the beginning of October.

Argos Resources have meanwhile successfully listed their company on the London Stock Exchange AIM and set up their office in Argos House in Stanley.

They now plan to conduct a 3D seismic survey over their acreage where two wells have already been drilled and hydrocarbons encountered in 1998.

Mrs Rendell said new data would equip the company in “de-risking drillable prospects.”

Meanwhile in the northern hemisphere Encore Oil has enjoyed a surge in value after discovering a significant new oil field close to the Shetland Islands.

But would this be likely to detract from exploration activities in the Falklands?

Mrs Rendell said she did not think it would have any impact on the exploration programme in the Falklands because most operators did not have licences to explore elsewhere and had licence commitments that needed to be fulfilled.

“As it can take over a decade to develop an oil field, with no guarantees of production if the economics don’t justify development, exploration can be expected to continue around the world, including the Falklands,” she said.

“The Falklands is of course only one country out of many promoting oil exploration, and companies weigh up the odds when applying for licences.

“We are fortunate to have committed licensees who are investing a lot of money in exploration at present, which is benefiting the local economy. We hope it will continue,” she said. (Penguin News)