Four operators get set for Falklands drilling

Borgny Dolphin semisubmersible drilling rig is on a journey from the U.K. to the Falkland Islands, expected to take 70-80 days. The rig is due to arrive in the islands late in April to begin a five-well drilling program for Amerada Hess Ltd., Lasmo plc, International Petroleum Corp., and Shell Exploration & Production Southwest Atlantic BV. Photo courtesy of Amerada Hess.

Amerada Hess Ltd. expects in May to spud the first well in virgin offshore territory north of the Falkland Islands, as part of a unique drilling program.

Four operators plan to drill five wildcat wells during May 1998 to February 1999 on licenses awarded by the government of the islands in October 1996 (OGJ, Nov. 4, 1996, p. 42).

Uniquely, the four operators have agreed to split the $25 million cost of mobilizing a drilling rig to the Falklands. Under the Falklands Offshore Sharing Agreement (FOSA), they will split the bill equally.

Cooperative drilling

The four FOSA partners are: Amerada Hess, operator of Tranche A blocks; Shell Exploration & Production Southwest Atlantic BV, operator of Tranche B; Lasmo International Ltd., London, operator of Tranches C and D; and International Petroleum Corp. (IPC), Vancouver, B.C., operator of Tranche F.

Andy Morrison, operations manager at Amerada, said that the companies have completed seismic surveys on their acreage, and that Borgny Dolphin semisubmersible rig is on its way from U.K. to the Falklands.

"We got together," said Morrison, "because of the large cost of mobilizing a rig to the Falklands and because drilling rigs are in short supply. This is probably the first time four operators have done everything for a drilling campaign in cooperation."

Morrison said the first well will be drilled by Amerada during about 45 days in May and June. Both Amerada wells will be drilled in about 450 m of water, to a vertical depth of 2,750 m.

The rig will drill one well for Lasmo in July-August, one for IPC during September-October, one for Shell during November-December, and then a second well for Amerada during in late December 1998-February 1999.

Morrison said the rig charter runs to March 1999 and includes options for all four companies to drill further wells if required. The rig is on a 3-year charter to Amerada Hess.

Morrison said the wells are not expected to be difficult compared with drilling west of U.K.'s Shetland Islands, where weather conditions are similar. "The big challenge has been setting up the logistics for the rig," he said.

For the drilling program, about 10,000 tons of equipment will be shipped to the islands. It will be deployed from a supply base near Port Stanley, the islands' capital on the eastern shore.

A helicopter is being shipped to the base this month, while anchor handling and standby vessels are also on their way. The helicopter will stop at a refueling point at the north of the Falklands, en route to drilling sites up to 250 miles offshore.

Exploration plan

The operators are currently carrying out seabed surveys of the proposed well sites and measurements of ocean currents. An environmental impact assessment for the drilling program was accepted by the islands' government last month.

Amerada acquired 1,515 line-km of 2D seismic data over its license area; Shell acquired 1,000 line-km of 2D and 350 sq km of 3D; Lasmo acquired 2,700 line-km of 2D over its two tranches; and IPC acquired 1,695 line-km of 2D data.

Morrison said each company will meet its own individual well costs. The FOSA agreement covers rig mobilization only, but may be extended by any or all of the partners if commercial discoveries are made.

"The wells are testing different geological models," said Morrison. "Some of the FOSA companies are discussing separate agreements to share seismic and drilling data."

Morrison said the minimum size for a viable oil find in the remote Falklands area is thought to be 100 million bbl of reserves. Any development would likely involve a production/storage ship and offshore tanker loading.

The operators reckon there are a number of prospects that could hold 200-400 million bbl of oil in the Northern Falklands basin, plus others in the 80-100 million bbl range.

Morrison said the prospects lie in Cretaceous strata and are comparable to plays off South Africa and parts of South America. The Falklands province is reckoned to be potentially "...an order of magnitude smaller than the North Sea, but still good."