týsdagur 27. november 2001síða 20

38 Nr. 229 - 27. november 2001 Nr. 229 - 27. november 2001 39 A few days ago, a consortium led by Amerada Hess brought the first Faroe Islands offshore drilling campaign to a close with a flourish by announcing a promising oil and gas discovery that augurs well for the future Jeremy Cresswell special correspondent writes Jeremy Cresswell There can no longer be any doubt about the success of this year’s pioneering off- shore drilling campaign, thanks to the determination of Amerada Hess and other members of the Faroes Consortium (BG, DONG and Atlantic Petroleum) that successfully pushed the lucky Marjun Prospect wildcat well to a much greater depth than was originally planned. With one clear discovery notched up out of three exploration wells drilled, the success rate achieved in the first |Faroes campaign is smack on the global aver- age. The trick now is to multiply that success sever- al times over during the next two to three years, convert the discoveries into commercial projects and guarantee the islands a place among the world’s oil and gas nations. Quite how this will be achieved is a question that will occupy many minds this winter as oil company geologists and others close- ly analyse the results of the three-well programme just completed. The conclusions drawn will be critical to the intended 2002 schedule, not least because they will significantly influence where the next tranche of wells are drilled. With three ticked off so far, there are another five commitment wells to drill under the four six-year licences awarded in the First Faroe Islands Offshore Licensing Round announced in August 2000. However, while we know that one of the three wells drilled this year was suc- cessful, the amount of pub- lic domain information about the early drilling results achieved by Amerada Hess, BP and Statoil, the first operators to drill the Faroe Islands Continental Shelf, remains sketchy. As expected, all focused on an area of the Faroe-Shetland Channel adjacent to the BP-operated Foinaven and Schiehallion oilfields in the UK sector. It was Statoil that drilled the first well and, while it is regarded as a dry hole, traces of hydrocarbons were found. Likewise, BP’s well was declared dry, albeit it too produced evi- dence of oil and gas. And then it was third time lucky ... for Amerada Hess. All three wells were drilled in the Judd Basin, which is a proven hydrocar- bon province that has so far delivered the UK sector commercial discoveries Foinaven and Schiehallion. Statoil’s Longan well (6005/15-1) was drilled this summer in licence area 003, 130km southeast of Faroes to a total depth of 4000m, terminating in Paleocene sediments. Rolf Magne Larsen, who is in charge of the Norwegian company’s international exploration and production pro- gramme, was reported to be disappointed, though he said that data obtained would be useful while plan- ning Statoil’s next commit- ment well. Faroese petroleum minis- ter, Eydun Elttur, said of the first result: “Obviously it is disappointing that Statoil did not find com- mercial oil. However, iden- tifying traces of hydrocar- bons in the first well must be considered encouraging for future work in the area.” Stakeholders in the Longan well are operator Statoil (35%); Phillips Petroleum (30%), Enterprise Oil (20%) and Veba Oil & Gas (15%). The rig used was the big semi- submersible Sovereign Explorer. Next off the starting blocks was BP (66.67%), partnered by Shell (33.33%) and working with the super-drillship West Navion. Drilling of well 6004/12-1 started on July 23, some 27km to the northwest of the UK sector Suilven discovery, and was eventually completed on September 19. The well was taken to a total depth of 4,354 metres, again in the Paleocene, and was side- tracked. Again, it fell to Elttur to break the apparently disap- pointing news. “Once again we have to state that the drilling opera- tion did not yield the expected result. The Svinoy exploration well penetrated the objective targets and demonstrated the presence of both oil and gas, although of non-commer- cial quantities at this loca- tion,” he said in a state- ment. “Establishing that the Faroe Shelf holds a work- ing petroleum system is however positive and con- siderably improves our expectations to finding oil in commercial quantities in the future.” As for the Amerada Hess-operated 6004/16a-1 Marjun prospect wildcat well, there had been specu- lation for several days that the big semi-submersible Sovereign Explorer was on to something good. The bets were on gas with con- densate or gas with oil. In the event, Minister Elttur announced the good news … it was gas and oil encountered over a gross payzone of 170 metres. However, the well, which was drilled to a total depth of 4246m in 950m of water instead of just 3800m as originally intended, was not tested owing to poor weath- er conditions. A cautious Elttur said: “The success of this well is very important for the Faroe Islands as a future oil province, even if we do not at this moment of time know whether the find is commercial. Challenging tasks lie ahead for all license holders on the Faroe Shelf ...” What the Marjun find achieved more than any- thing else was to remove all doubt about the existence of a potentially viable petroleum system beneath at least part of the basalt rock layer that has made assessing the Faroese sector so difficult It is common for traces of hydrocarbons to be found when drilling exploration wells, but that does not mean conditions are any- where near right for oil or gas to accumulate, hence the note of disappointment in Elttur’s announcements about the BP and Statoil wells. But an immense amount of valuable infor- mation was obtained from both … the kind of data that could make a real dif- ference to the next year’s campaign by other consor- tia, including the Agip and Foroya Kolvetni (FK) part- nership. This is a particularly important time for FK in that, though it is largely owned by Faroese, the company is expected to float on the London Stock Exchange early next year in a bid to raise £10-20mil- lion to finance its partici- pation in the great, slow- pace Faroese oil race. “We’re ready to go … waiting for the right time to do it (float),” said FK’s chairman Graham Stewart. “We’ve decided to wait until the New Year, most likely first quarter.” Stewart is also finance director of Aberdeen-head- quartered Dana Petroleum, which holds an option over 20% of FK’s shares and as a strategic partner Had FK been floated on the LSE as an oil junior ahead of the first drilling campaign, it is possible that its share price would have suffered because of the Statoil and BP disappoint- ments, but then picked up with the Amerada Hess news. Subject to a whole- sale collapse in the price of oil this winter, it looks as if FK can look forward to a favourable reception when its shares begin trading ahead of the second drilling campaign. FK and Agip’s two licences - 002 and 005 - span 11 part blocks and the Faroese company has the right to increase its holding to 22% before drilling starts next summer, armed with fresh 3D seismic sur- vey data and information gleaned from this year’s pioneer wells. However, it has been a long haul to get even to the current position. Until this summer, the only known traces of hydrocarbons in the Faroes area were found on land and comprise coal deposits, organic waxes found in basalt, and incon- clusive traces of oil mixed with water in the Lopra-1 experimental well drilled in the early 1980s. Geological mapping of the islands started in 1938 and, among the very earli- est surveys known to have been carried out offshore by oil companies, is a little- known seismic campaign by Texaco in the mid 1970s. It is understood some 5,000km of seismic data was acquired, but which proved difficult to read, in part because of the limited capabilities of the 2-D seis- mic equipment used and due to the basalt layer that is characteristic of the Faroes Shelf. An offshore borehole was, however, drilled under the Ocean Drilling Programme in the mid- 1970s, though this was for scientific purposes and not a quest for hydrocarbons. The Texaco/ODP work took place before the huge but complex and difficult Clair field was found on the UK side of the Faroe- Shetland Channel in 1977. While that event went unnoticed by the average Faroese, it registered in the corridors of power, both in Thorshavn and Denmark, which still rules the islands. Information about events from the Clair find through to the ‘90s is almost non- existent. There are not even references to the period in the 1993 Report of the Faroese Hydrocarbon Planning Commission to the Faroese Government. However, Arni Olafsson, for many years special adviser on Faroe Islands Affairs at the Danish Ministry of Foreign Affairs and member of the Faroese Hydrocarbon Planning Commission in 1993, pro- vides a clue as to how events were being watched at the time. Referring to the decision by Copenhagen in 1992 to cede mineral resources rights to the Faroese Home Rule government, Olafsson told the first Robert Gordon University/Smith Rea Energy Analysts Conference in Aberdeen (October 1994) that it “came as a rather sudden political culmination of 17 years of difficult negotia- tions between Thorshavn and Copenhagen”. On September 11, 1992 came the milestone event the Faroese had been await- ing for some time ... the decision by Denmark to surrender all rights to “minerals in the subsoil” to Faroese control, and there- fore the right to determine the course of the possible future oil and gas extrac- tion industry. In December 1992, the Faroese Hydrocarbon Planning Commission comprising Faroese and Danish experts in geology, ecology, petroleum admin- istration, oil industry rela- tions, economics and law was established to research and submit a report which would serve as the basis for initial policy decisions and to draft legislation neces- sary for the first stages of hydrocarbon development. That report and a draft Bill on preliminary seismic sur- veys, etc, were ready in June 1993. The Government put the report and bill before the Logting and, that same year, on December 1, the decision was taken to form the Faroese Petroleum Administration (OFS). By this time, UK Atlantic Frontier (west of Shetland) successes had stoked up oil company interest in the Faroes. In November 1993, OFS wrote to the oil companies, notifying the intention to commission seismic and gravimetric surveys. Bids were invited from survey companies and Western Geophysical secured both permits and ran 12,000km of survey lines. World Geoscience con- ducted aerial surveys in 1995 and 1996. Also, in 1996, the Faroes sector was thrown open to all parties interested in conducting further seismic work, including re-entering and deepening the Lopra-1 well. It was on January 18, 1996 that a consortium of 19 oil companies led by DOPAS of Denmark won permission to re-enter the Lopra-1 well, which they duly did in July 1996. February 15, 1996 saw the right to issue explo- ration licences transferred from the government to OFS and, by February 1, 1997, 10 preliminary licences were issued, the allocation of which was influenced by what the oil companies themselves had asked for. A total of 23 oil companies had submitted 13 nominations covering 108 whole and 26 part- blocks. 43 whole and 13 part-blocks were classified as “very interesting”. Then followed the long grind to get legislation finalised and onto the statute book, the decades- long boundary dispute with the UK settled, and the first licensing round launched. The last mentioned and, in practical terms, most criti- cal event did not take place until February 1999. Finally, OFS received 22 licence applications from 17 oil companies and, in August 2000, seven licences were awarded to 12 oil companies. Aside from the four six-year terms granted, three nine- year terms were also issued, with 005 going to Agip with FK; 006 handed to Statoil with Anadarko, Phillips, Enterprise and Veba; and 007 issued to Anadarko alone. Some 70% of the acreage origi- nally offered to the compa- nies was not awarded. And so the hunt has begun in earnest. But a massive amount of effort over the next few years and some significant discover- ies will be required before the long-held dream of the Faroe Islands becoming an oil and gas producing province in their own right can ever be realised, if that ever happens. However, it is far too early to know what the real potential is, though figures like 1 bil- lion barrels of crude have been bandied about … manna to the Faroese busi- ness community whose dream of cashing in on a mini-oil bonanza may no longer be as far-fetched as it once seemed. Jeremy Cresswell is Editor in Chief at UK analysts EIS Energy Information Services. The Faroes Oil Affair Kenneth Rasmussen Beras P/f 5. oktober skrivaðu Ame- rada Hess (Faroes) Limited og Beras P/f undir sáttmála um veiting av »General Consumables and Safety Clothing«. Sáttmálin, sum varð boðin út á føroysku veitaraskránni, er galdandi í 2 ár; og møguleiki er at leingja sáttmálan í 2 x 1 ár. Beras P/f er hjánavn hjá Teymavirkinum P/f í Runa- vík. Síðan 1961 hevur Teymavirkið framleitt teymar og línu til føroyska fiskiflotan. Eisini verður stórur partur av fram- leiðsluni útfluttur. Umframt framleiðsluna hevur Teym- avirkið stóran skipshandil á Heiðavegnum í Runavík, og í farna mánaða keypti Teymavirkið Snørisvirkið P/f í Klaksvík, har fram- leiðsla og skipshandil eisini eru. Í skipshandlinum eru fiskireiðskapur, arbeiðs- klæði, persónlig trygdarút- gerð og onnur útgerð til fiskivinnuna at fáa. Við drúgvu royndunum hjá Teymavirkinum er Beras farið undir at bjóða olju- vinnuni tær tænastur, sum skipshandilin veitir fiski- vinnuni. Beras útvegar allar vørur til oljuvinnuna. Ar- beiðsklæði og persónlig trygdarútgerð eru á goymslu, meðan restin verður keypt frá veitarum í Føroyum og uttanlands. Heildarveiting Beras bjóðar seg til at sam- skipa allar veitingar til olju- feløgini. Hetta ger, at olju- feløgini við at venda sær til Beras, kunnu avgreiða allar bíleggingar. Á henda hátt koma oljufeløgini at hava samskifti við færri veitarar, og soleiðis spara tíð og orku uppá at leita eftir vørum og tænastum í Før- oyum. Beras hevur fingið av- talur við feløg í granna- londunum og aðrastaðni, sum hava drúgvar royndir í oljuvinnu. Talan er bæði um høvuðsveitarar og und- irveitarar. Fleiri av hesum hava sáttmálar um heildar- veiting til oljufeløgini og teir stóru altjóða arbeiðs- takararnar. Gjøgnum hesar samstarvsavtalur er møgu- ligt hjá Beras at fáa fatur á stórum parti av teimum vørum og teirri útgerð, sum brúk er fyri í oljuvinnuni. Royndirnar av fyrstu boringunum Royndarboringarnar í ár hava ikki havt serliga nógv føroyskt veitingarvirksemi við sær, burtursæð frá mat- vøruveitingunum. Hetta kemur partvís av at boripallurin og boriskipið bert hava verið í føroyskum øki í styttri tíðarskeið og tí ikki hava brúkt stórvegis av vørugoymsluni umborð. Eisini er greitt at feløgini, sum von eru við at brúka ávísar veitarar í granna- londunum, ikki gera broyt- ingar í vanligu manna- gongdunum í sambandi við keyp av vørum og tænast- um, tá talan bert er um fáar vikur í føroyskum økið. Komandi boringarnar Tað virksemi, sum verið hevur í ár, hevur givið føroyingum greiðar ábend- ingar um hvørjar treytir og krøv, sum sett verða til veit- arar í hesi nýggju vinnuni. Meðan vit bíða eftir at næstu royndarboringarnar fara í gongd, eiga vit at kunna byggja víðari uppá royndirnar frá 2001. Tað eru altíð ávís viðurskifti, sum kunnu betrast. Við einari miðvísari menning av teirri einstøku fyri- tøkuni, verða, sum frá líður, færri og færri grundir hjá oljuvinnuni til ikki at keypa tænastur í Føroyum. Beras fer at halda fram við fyri- reikingunum, soleiðis at felagið í minsta lagi kann koma á eitt støði, sum eisini ger Beras kappingar- ført uttanfyri føroyska landgrunnin. BERAS fingið sáttmála við Amerada Hess Vagar Airport, the airport in the Faroes, is located on the island of Vágoy. Regular bus and ferry connections are linked to scheduled arrival and departure flights. The trip to Tórshavn takes 1 hour and 40 minutes by bus and ferry and 12 minutes by helicopter. Early in the year 2003 you can travel from the airport to Tórshavn via the new tunnel between Vágoy and Streymoy in about 40 minutes. The airport is managed by the Civil Aviation Ad- ministration under the Danish Ministry of Transport. The runway is 1,250 metres long and 30 metres wide and is positioned in a security zone of 1,370 x 150 metres. The runway is asphalt and grooved side- ways to increase friction. The runway is equipped as a »non-procession app- roach« runway with the ICAO-code mark »3«. Increase Up to the end of October 139,717 people travelled through the airport, in- crease of 11.0% compared to the same period last year when the passenger total was 143,208. Up to the end of October the total number of opera- tions was 5,033 again for last year. This represents an increase of 21.1% for the period. Overall a large pro- portion of increase in operations and passenger from the offshore oil and gas exploration activity in Faroese territory. This is expected to terminate for 2001 over the end of November. Offshore activities. Passengers total: Scheduled and non-sched- uled 3,380 Flight operations total: Scheduled and non-sched- uled 433 (period 01-07-01/31-10-01) Vágar Airport Flogfarið hjá Atlantic Airways á vøllinum í Vágum C M Y K 39 38