On April 2nd the Falkland Islands Government released a press statement regarding the announcement of results from the Zebedee well:
"The Falkland Islands Government welcomes today’s announcement by Premier Oil and partners that the 14/15b-5 ‘Zebedee’ exploration well has been declared an oil and gas discovery following the completion of its evaluation programme. Zebedee is the first well of the six-well drilling campaign planned to take place in Falkland Islands waters through 2015.
MLA Jan Cheek, portfolio holder for Mineral Resources, commented:
“We congratulate Premier and their partners on this early success, which provides an excellent start to the 2015 exploration programme. The Zebedee discovery identifies additional resources that could form part of subsequent phases of the Sea Lion field development.”
Enquiries and requests for further information can be directed to the Public Relations & Media Office. Email:
FIG approves local content code of practice. For full press release please click here
FIG responds to Premier Oil announcement. The Falkland Islands Government notes the announcement by Premier Oil of their revised proposal for commercial oil production in the Falkland Islands, which it is considered represents a realistic solution to progress development in the current international oil price environment.
FIG Director of Mineral Resources, Stephen Luxton, commented: "FIG and its advisers has been working closely with Premier Oil to take forward development of the Sea Lion field and look forward to the existing productive working relationship continuing through project sanction to first oil production."
FIG welcomes the participation and investment of international oil companies in the opportunities for oil and gas exploration and development in Falkland Islands waters.
Mobilisation for the forthcoming exploration programme commencing in early 2015 is already underway, and FIG has received the first submissions from operators seeking the required regulatory approvals to commence drilling. FIG continues to be committed to regulating offshore oil and gas exploration and production to North Sea standards for safety and environmental protection.
New exploration campaign announced. The Falkland Islands Government welcomes the announcement this morning that a drilling rig has been contracted by a consortium of licensees for a new six-well programme of offshore exploration and appraisal work commencing in early 2015.
The multi-operator programme will test a number of significant new prospects across several offshore licence areas in both northern and southern basins, and is understood to contain various options to extend the duration beyond the initial commitment.
Director of Mineral Resources, Stephen Luxton, commented,
"We are pleased to see confirmation of this exploration programme commencing in 2015 as forecast. Preparations are already underway within the Falkland Islands to accommodate the logistical requirements for the forthcoming drilling, and FIG looks forward to working closely with the oil industry to deliver a safe and successful campaign."
Update of license map and license status document. For links to the document please click here
The Department of Mineral Resources is pleased to announce the approval and introduction of the new petroleum operations notice 10 entitled "Application to Use and Discharge Non-Aqueous Drilling Fluids and Associated Cuttings". This notice is now in force with immediate effect. A copy of the notice can be downloaded from the link below or the downloads section of the website.
Following Rockhopper Exploration’s announcement today regarding tax arising from the Sea Lion farm-out, the Falkland Islands Government Treasury is pleased to confirm that an agreement has been reached with Rockhopper Exploration.
To see the complete press release please click here.
On the 4th of November the Falkland Islands Government published the updated version of the FIG Oil Readiness Checklist on its website.
The checklist was created to summarise activities, progress and responsibilities in key areas arising from the Government’s ongoing program of activities to prepare for the development of the hydrocarbons industry. The checklist is updated every quarter to reflect progress being made against each action. It remains a ‘living’ document and will continue to be published on a quarterly basis.
The latest update includes details of a new initiative to map the oil industry supply chain and identify gaps and opportunities for local businesses and local people. FIG was pleased to fund this Chamber of Commerce initiative and looks forward to seeing the results.
The most recent version of the Oil Readiness Checklist can be downloaded from the FIG Policy website
Falkland Oil & Gas (FOGL) and Desire Petroleum have reached an agreement to pursue a combination of the two companies, under the terms of which FOGL will acquire Desire’s share capital in exchange for FOGL consideration shares.
In addition to the combination, FOGL has also signed Heads of Agreement with Premier Oil and Rockhopper Exploration with respect to a farm-out of Desire’s current interests in PL004a and PL004c, which will see the combined FOGL/Desire group’s interest drop to 40% in each of the two licences.
The move is subject to agreement by Desire Shareholders and approval by the Falkland Islands Government.
Full details of the operation can be obtained from FOGL’s press release on the operation.
Following the completion of Premier Oil’s baseline survey over the Sea Lion area, environmental efforts have focussed on covering the knowledge gaps currently present in the Falkland Islands scientific data in order to more accurately gauge the impact of all future operations. The Hydrocarbons Environmental Forum has now identified a series of research priorities, and initial funding of £200,000 over three years has been secured from the Petroleum Licensees Association (FIPLA) and the Falkland Islands Government. The first two knowledge gap projects are expected to commence in late 2013/ early 2014, and will result in the appointment of two dedicated project officers who will be based the Falkland Islands for the duration of two years.
The Falkland Islands Government recently received news of a farm-in agreement between Falkland Oil and Gas Ltd and Noble Energy.
Noble Energy are acquiring a 35% stake in FOGL’s interests in the Falkland Islands under a farm-in deal that will assist in financing the development of FOGL’s future exploration programme.
Stephen Luxton, Director of Mineral Resources for the Falkland Islands Government said:
“FIG welcomes the entry of Noble Energy as a new partner in Falkland Islands licenses. Another significant international energy company has given its vote of confidence to the many interesting opportunities available in the Falklands. We look forward to meeting the Noble team in due course and working with the new partnership to progress their licence interests in the South Falkland Basin.”
Hon. Jan Cheek, Member of the Falkland Islands Legislative Assembly said:
“The investment of another respected international partner is good news for the oil industry and the Falkland Islands. This announcement is another clear indication as to how positively industry view prospects in the Falkland Islands. The Falkland Islands are an excellent investment destination, and as with all current and potential partners we look forward to working further with Noble Energy through the development of FOGL’s prospects.”
Throughout 2013 Regeneris Consulting carried out a socio-economic impact assessment for the Falkland Islands. In July 2013 the final report was published and made available to the public. The report considered the impacts of several scenarios ranging in size. This included the development of the Sea Lion field but also the possibility of the Sea Lion field alongside further exploration and/or development operations elsewhere in Falkland’s waters leading to cumulative effects. This report will provide vital information for policy makers over the coming years to mitigate against any negative effects of hydrocarbon development.
At its meeting of 24th July 2013, Executive Council agreed an overarching set of policy principles for hydrocarbons developments in the Islands. The policy statements capture the core principles that will govern the development of an oil and gas industry in the Islands and how the benefits of the industry will be managed.
The document provides a strong message to the hydrocarbons industry as to what is expected of them, and provides a clear statement of intent to the local community with regards to how revenues will be managed.
A copy of the full policy statement are available to download from here.
Hydrocarbon focus in the Falkland Islands shifts towards the Government’s preparedness for future exploration campaigns, field developments and general hydrocarbon development.
This is in response to the completion of the Oil Readiness Review with the submission of three external reports outlining gaps and highlighting required updates. The following areas were identified as needing to be update: tax regulation; marine legislation; health, safety, environmental regulation; and planning regulation.
These reports along with a number of key Executive Council decisions in March 2013 allowed the Government to compile and publish an extensive oil readiness checklist to keep the public informed of current and future work priorities.
Also included in the government’s preparations has been the appointment of Anne Drinkwater as a retained consultant. With over 35 years’ of experience in international exploration and production, Anne Drinkwater will provide high level strategic policy and planning advice regarding challenges facing the Falkland Islands.
2013 started with a series of 3D seismic surveys being performed to the south and south east of the Falklands by operators Borders & Southern and Noble Energy. The surveys were carried out in preparation for possible drilling campaigns in 2014/15 and hope to increase the operators understanding of the relatively unexplored Southern and Eastern Basins. There is a possibility of further seismic surveys in the coming Southern summer season.
On the 26th June 2012 FOGL announced the completion of a farm out agreement with Edison International S.p.a.
Edison will farm in and earn a 25% interest in FOGL's northern area licences. Edison will contribute its pro-rata share of the costs of the 2012 drilling programme, comprising two exploration wells. Edison will farm in and earn a 12.5% interest in FOGL's southern area licences and will contribute its pro-rata share of the 2012 work programme.
Edison will also pay its pro-rata share of certain historical costs incurred by FOGL during 2011 related to the 2012 drilling programme. Edison's share of historical expenditures, together with their share of the 2012 drilling programme costs, are expected to be of the order of $50 million.
In addition Edison will make a separate cash contribution to FOGL of $40 million; $20 million on completion of the FOA and a further $20 million in 2013.
In order to obtain the option, Edison had already paid a $3 million non-refundable fee.
FOGL will retain operatorship of the northern and southern area licences.
Edison is a long established international exploration and production company which currently produces 48,000 barrels oil equivalent (boe) per day. Edison has approximately 360 million boe of reserves from over 80 licences spanning countries such as Italy, Egypt, Norway, Croatia, Algeria and the UK. Edison has experience in a wide variety of operating environments and has participated in a number of deep-water ventures elsewhere. Edison is now controlled by EDF, the world's leading electricity company.
This farm out will considerably strengthen FOGL's financial position. In the event that the two exploration wells are drilled within budget it is estimated that on completion of the wells the Company's cash balances will not be less than $100 million and they will be available to fund additional exploration work. This may include further drilling and/or the acquisition of 3D seismic.
The farm out to Edison has been approved by the Falkland Islands Government.
Borders & Southern has announced a significant gas condensate discovery. Well 61/17-1 was drilled to a total depth of 4876 metres and as predicted, the strong AVO anomaly represented a porous sandstone reservoir containing hydrocarbons. During drilling, the well encountered good hydrocarbon shows from 4633 metres down to 4810 metres. Fluid samples from the reservoir have been recovered and will be brought back to the UK for analysis. Once the lab analysis is complete and the results integrated with other data collected from the well, the Company will be able to comment on the liquid content of the reservoir.The company now intends to complete wire line logging operations, plug and abandon the well in line with regulatory requirements. To see the full press statement from Borders & Southern Petroleum plc click here.
The Ocean Guardian drilling campaign came to an end with the completion of Rockhopper Exploration's Sea Lion/Beverley well in late December. The well penetrated four different prospects: Beverley, Casper South, Casper and Sea Lion. Beverley and Casper South were declared gas and gas and oil discoveries respectively, while the appraisal of Sea Lion and Casper proved successful with 8m and 2.4m of net oil pay respectively. Meanwhile, Borders & Southern Petroleum's drilling campaign is expected to start in early February as the deep-water rig Leiv Eiriksson prepares to spud on the Darwin prospect. The Leiv Eiriksson will drill a total of four wells to the South and East of the Falklands; two for Borders & Southern and two for Falklands Oil & Gas Limited. For more information please visit our current exploration page.
Rockhopper Exploration has announced the successful abandonment of well 14/10-9 and its sidetrack, 14/10-9z. As well as penetrating and appraising the Sea Lion Main Complex, the well confirmed a Gas and Oil Discovery in the Casper target, with 18m of total net hydrocarbon pay and good reservoir quality. The 14/10-9z sidetrack collected 60m of core through Casper and Sea Lion and brings the total core collected in the present drilling campaign to 340m. Rockhopper will now drill a well in the PL004b licence area, originally part of Desire Petroleum acreage now operated by Rockhopper under the terms of a recent farm-in agreement. For more information, please visit our current exploration page.
01 July 2011. The exploration programme that began in February 2010 using Diamond Offshore Drilling's semi-submersible, Ocean Guardian, is ongoing. Twelve wells have been drilled so far during this programme, bringing the total number of wells drilled in the Falkland Islands Offshore Area to 18 (6 wells were drilled in the 1998 drilling campaign). Rockhopper Exploration will continue using Ocean Guardian to drill a programme of exploration and appraisal wells in the North Falkland Basin. This programme is currently expected to last until at least the 3rd Quarter of 2011. See the Current Exploration page for further details.
Borders & Southern Petroleum signed a contract with Ocean Rig UDW for the provision of mobile drilling services using the Leiv Eiriksson, a dynamically positioned, harsh environment, semi-submersible, for use both by Borders and Southern and Falkland Oil and Gas Ltd. The rig is expected to be mobilised to the Falklands in the 4th Quarter of 2011.
For more information on company operations in the Falkland Islands Offshore Area, please visit the relevant company's website.
Argos Resources - www.argosresources.com
BHP Billiton - www.bhpbilliton.com
Borders & Southern - www.bordersandsouthern.com
Desire Petroleum - www.desireplc.co.uk
Falkland Oil and Gas - www.fogl.co.uk
Rockhopper Exploration - www.rockhopperexploration.co.uk
The exploration programme that began in February 2010 using Diamond Offshore Drilling’s semi-submersible, Ocean Guardian, is ongoing. 6 wells have been drilled in this programme, bringing the total number of wells drilled in the Falkland Islands Offshore Area to 12 (6 wells were drilled in the 1998 drilling campaign). Desire Petroleum and Rockhopper Exploration will continue using Ocean Guardian to drill a programme of exploration and appraisal wells in the North Falkland Basin. This programme is currently expected to last until the 3rd Quarter of 2011.
Borders & Southern Petroleum signed a contract with Ocean Rig UDW for the provision of mobile drilling services using the Eirik Raude, a dynamically positioned, harsh environment, semi-submersible. The rig is expected to be mobilised to the South Falkland Basin in the 4th Quarter of 2011.
The North Falkland Basin Operators, Argos Resources, Desire Petroleum and Rockhopper Exploration have recently contracted Polarcus Limited to undertake extensive seismic survey operations in the North Falkland Basin. The data acquisition is currently in progress.
6/12/2010 Update to news item from 2/12/2010. Desire Petroleum has provided an update regarding results from the FI 14/15-2 ‘Rachel North’ well. The preliminary results, announced on 3rd December 2010 suggested that this well was an ‘oil discovery’. However on 6th December Desire reported that sampling of the main sand has shown that the hydrocarbons are residual and that the mobile fluid is water. A deeper target is still interpreted to be oil bearing, but the interval is thin and reservoir quality is poor. Following the acquisition of additional wireline data, the Rachel North well will be plugged and abandoned. The Ocean Guardian rig will then move to the Dawn/Jacinta prospect in which Desire has a 100% interest.
2/12/2010 - Desire Petroleum announces oil discovery in FI 14/15-2 ‘Rachel North’. Desire Petroleum announced on 2nd December 2010 that its well, FI 14/15-2 ‘Rachel North’, has been drilled to a depth of 3052 metres. That the first indications are that this well is an oil discovery. Desire Petroleum will now complete further wireline logging and sampling operations on the well, after which the company will release further information.
Borders & Southern Petroleum plc announced on 29th November 2010 that it has signed a contract with Ocean Rig UDW Inc. for the provision of mobile drilling rig services using the Eirik Raude drilling unit, a dynamically positioned, harsh environment semi-submersible. The rig is currently operating in West Africa and is not expected to commence operations in the South Falkland Basin until late 2011.
Rockhopper Exploration announces preliminary results of well testing in FI 14/10-2(Sea Lion).
First well in South Falkland Basin
The first well in the South Falkland Basin, FI 61/05-1 "Toroa", has been drilled to a depth of 2476 metres and has been plugged and abandoned. Diamond Offshore’s Semi-Submersible Ocean Guardian will now drill Rockhopper Exploration’s Ernest prospect during July and August. This well will be the first well to be drilled in the southern part of the North Falkland Basin.
Rockhopper Exploration announces oil discovery in well FI 14/10-2 (Sea Lion)
The Falkland Islands Government is extremely encouraged by Rockhopper Exploration’s announcement regarding well FI 14/10-2 (Sea Lion) in which they state they have made the first oil discovery in the North Falkland Basin.
Hon Emma Edwards, Member of the Legislative Assembly, said, “The initial results from Sea Lion are very exciting and we would like to offer our congratulations to Rockhopper Exploration. We look forward to receiving more information in due course. This bodes well for the long term future of the Falkland Islands hydrocarbons industry.”
Oil rig Ocean Guardian commenced exploratory drilling operations offshore the Falkland Islands on 22nd February. The rig is contracted to Desire Petroleum plc which has a licence to drill in the North Falkland Basin. On completion of this initial Desire Petroleum well, the rig will drill a well for Rockhopper Exploration plc in their licensed acreage.
NEW LICENCE AWARDED TO DESIRE PETROLEUM AND ARCADIA
A new licence, covering blocks 25/8, 9 and 14b in the North Falkland Basin has been awarded to Desire Petroleum (20%) and Arcadia Petroleum (80%). These blocks were offered in a new round of open-door licensing in April 2008. Desire have been appointed operator.
PARTIAL LIFTING OF OPEN-DOOR LICENSING SUSPENSION
The Falkland Islands Government has (from early April) partially lifted the suspension on open-door licensing. Following the award of new acreage to Desire and Arcadia, the partial lifting of the suspension applies only to blocks 25/7, 12, 13, 17 and 18. A copy of the new guidance notes for applicants can be downloaded below:
DESIRE PETROLEUM ANNOUNCES DETAILS OF FARM-OUT AGREEMENT WITH ARCADIA
Desire Petroleum has released the details of the farm-out agreement it has reached with Arcadia. Details can be found on Desire's company website (Desire Petroleum PLC).
DESIRE ANNOUNCES NEW FARM-IN ARRANGEMENT
Desire Petroleum has announced that it has accepted the terms of an offer from a significant party to farm-in to three of the eighteen exploration prospects identified by Desire in the North Falkland Basin and currently carried in the Company's prospect inventory, subject to certain conditions. See www.desireplc.co.uk for details.
Desire Site Surveys
Desire Petroleum has announce that Wavefield InSeis has completed the full site survey programme on Tranches C, I and L as planned. The entire survey was successfully acquired in 6 days with no weather downtime. The outstanding lines in Tranche C were acquired in addition to new site surveys over 4 prospects in Tranches I and L.
Rockhopper Site Surveys
A site survey over the Ernest prospect in PL024 was completed by Wavefield Inseis in Dec 2007.
Rockhopper new 2D data
Rockhopper Exploration has announced that Wavefield Inseis has finished collecting a new tranche of 550 Km of 2D seismic data over its Weddell prospect.
Planned phased relinquishment of BHP/FOGL acreage
As per their licence agreement with FIG, BHP Billiton/FOGL have relinquished 25% of their acreage holding over PL025, 026, 027, 028 and 029.
Rockhopper licence changes
Rockhopper Exploration has, in accordance with the terms of their licences PL023 and PL024, given notice of their intention to move to Phase 2 with effect from November 2007. This move to Phase 2 entails Rockhopper automatically relinquishing 50% of the licence area; they have identified this area and FIG has agreed to the plan.
Rockhopper 3D seismic
Rockhopper Exploration have finished processing of their 3D seismic survey over parts of licences PL032 and PL033 previously held by Shell. The BGS has, on behalf of FIG, started its own independent evaluation of this 3D dataset.
Borders and Southern 3D seismic
Borders and Southern Petroleum has successfully applied for a two year extension to Phase 1 of their exploration programme for licences PL018 to PL022, in exchange for a commitment to acquire at least 750km2 of new 3D seismic data over part of the licensed area. It is anticipated that the survey will commence in October 2007.
FIG amends exploration phases 1 and 2 for existing "Open Door" Production Licences
The Government has proactively decided to alter and extend the exploration phases of existing "Open Door" Production Licences in order to ensure more time is potentially available to all licensees to pursue aggressive and expeditious exploration programmes in these predominantly deep water areas.
Phase 1 of the licences currently run for either 3 years (if 2D seismic is planned) or 5 years (if 2D seismic plus 3D seismic is planned. Additionally, there is already a facility to allow extension of a 3 year Phase 1 to 5 years if 3D seismic is committed part way through Phase 1. The Government has now decided to amend Phase 1 to allow exploration for up to 8 years, according to the following schedules:
|Work Programme||Time allowed in Phase 1|
|2D seismic||3 years|
|2D + 3D seismic||5 years|
|2D seismic + well||6 years|
|2D + 3D seismic + well||8 years|
In addition, the Government has decided to extend the existing Phase 2 exploration period, which is entered only subject to a 50% relinquishment of acreage and a commitment to drill a well, from 3 years to 5 years. This will allow greater flexibility and longer lead-in times for companies attempting to source deep-water capable drilling rigs, which are currently in short supply worldwide.
BHP Billiton farm-in to FOGL acreage
BHP Billiton Petroleum, based in Houston, has agreed to farm-in to all of FOGL's licences. As part of the arrangement with the Government, the companies have agreed to move two of the existing 4 commitment wells on the acreage from Phase 2 into Phase 1, so that one well will be drilled on PL010 to PL016 before December 2010, and one well will be drilled on PL025 to PL031 by December 2010, taking advantage of the Government's decision to extend Phase 1 of "Open Door" licences in the event of drilling during that Phase.
Furthermore, the companies have agreed immediately to relinquish all of PL030 in exchange for the Government allowing the merger of the currently separate work programmes for PL031 with that for PL025 to PL029. This means, effectively, that instead of drilling a commitment well in each of the grouped areas PL025 to PL029 and PL030 to PL031, the companies may now drill the two commitment wells for these licences anywhere within these combined licences (minus PL030 which has been returned to Government).
The companies will be able to enter Phase 2 in December 2010 only if they agree at that time to drill their outstanding two commitment wells in Phase 2, with one well in PL010 to PL016 and one well in PL025 to PL031. Entry to Phase 2 will be dependent on the Phase 1 wells having already been drilled.
Also, as part of the farm-in negotiations, the Government have required the group to relinquish 25% of their 2004 licences (PL025 to PL031) in December 2007, regardless of the fact that both will now run to December 2010 in Phase 1. Then, in December 2010, before the group can move to Phase 2, they will have to relinquish a further 25% of the original area. The group has already relinquished 50% of its 2002 licences (PL010 to PL016) as part of a round of previously imposed Government sanctions.
BHP Billiton will assume the operatorship of these licences from January 2008.
Tullow leave Falklands: Tullow Oil, who inherited their share of FOGL's 2002 Southern Basin licences (PL010 to PL016) when they bought the world-wide assets of Hardman Resources, has decided to exercise an option to resign from the FOGL licences.