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De-Risking While Watching Excitement Build |
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Written by J. Cresswell
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Friday, 18 April 2008 |
As a joint association for oil companies that have been granted license to explore for oil and gas in the Faroes, FOÍB provides a single point of contact on matters of broad policy and on general operational issues.
De-risking the Faroese continental shelf is complicated and takes time but real progress has in fact been made. Indeed the William exploration well operated by BP marks the latest major step along the road, with another major step, the proposed Third Faroes Offshore Licensing Round marking the next major stage.
Indeed, the drilling of the William well completes fulfilment of the First Round commitments. A well planned by ENI, most likely to be drilled in 2009, though on First Round acreage, is a result of the de-risking process and is not a commitment well.
While drilling has been one of the signatures of the First Round, there are no such commitments built into the Second Round. However, the licensees have carried out a great deal of de-risking work on the acreage, where basalt is the major challenge.
The Third Round is most likely to be announced in July (2008), with submissions for bids around September. This Round covers an area and oil companies will be invited to table submissions as to their preferred blocks.
But that Round is in the future, meanwhile, unless the BP well encounters clear evidence of oil and/or natural gas, the First Round Marjun-1 well offers the most positive sign of a hydrocarbon system on the Faroese Continental Shelf.
Basalt remains a big challenge, but so too is attracting sufficient investment from petroleum companies that have the global stage to invest on; also drilling hardware.
It is well recognized that the Faroese sector is a tough area to explore, plus there has so far not been a commercial discovery.
Few rigs are equipped to drill out in the North Atlantic… the operational season tends to be short and long planning lead times is necessary. While there are rigs capable of working “out of season”, this is a costly option.
It is important to realize that there is a proven hydrocarbon system and it is possible to drill through the basalt. However, in the context of the basalt itself, the greatest issue remains “seeing” through such volcanics, even with the state of art seismic technologies and interpretation techniques that are now available.
Of course, it is excellent news that there have been successes on the UK side of the Faroe-Shetland Channel, most notably the large Rosebank/Lochnagar discovery being appraised by Chevron; but also Cambo.
Fortunately, the Faroes have been successful in attracting international oil companies and, of course, they are hopeful of making large discoveries. It is good that they are active in UK West of Shetland waters. From a Faroese Oil Industry Group (FOÍB) perspective, it is good that all the oil companies active in the Faroese area are members of the organization. There are currently 11 in membership.
Indeed FOÍB has played an important role in the hunt for hydrocarbon resources offshore the Faroes. It started life in 1997 as an oil company networking organization, which then evolved into FOÍB.
In a nutshell, FOÍB is a joint association for oil companies that have been granted license to explore for oil and gas. It provides a single point of contact with the Faroese authorities and institutions on matters of broad policy and on general operational issues.
One of its purposes is to ensure that jointly funded projects are managed and the results disseminated in an efficient and effective manner. Other core elements of its mandate are:
• To maintain and expand the knowledge base for the Faroese area, obtaining new data for the benefit of the development of an offshore oil & gas industry in the Faroe Islands.
• To engage in constructive dialogue with interested parties in the islands as a forum for industry communication with the Faroese Authorities and other interested parties.
• To strengthen and promote the development of competitive Faroese oil industry through co-operation and stakeholder dialogue.
• To address regulatory and fiscal issues whilst maintaining the highest commitment to HSE matters.
Clearly, with excitement building on the UK side of the Faro-Shetland channel regarding Chevron’s Rosebank/Lochnaga and its likely development, and with other companies planning further drilling, these are exciting times on the Atlantic Frontier.
But it should not be forgotten that this is an industry where progress is measured in years; it takes time and patience. One day the oil prize will also surely be realized for the Faroes.
Link to pdf presentation...
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Energy, Oil & Gas