Exploration History

Academic and seismic drilling (1950-1974) — Argentine wells (1980-1994) — Falklands production licences - North Falkland Basin — Falklands production licences - South Falklands Basin — The Falkands Offshore Sharing Agreement (FOSA) — Wells drilled in the 1998 campaign

Academic and seismic drilling - 1950-1974

1950s - Seismic refraction profiles shot across the Falklands area by Lamont-Doherty Geological Observatory

1970s - A range of mostly academic studies, culminating in the three DPSP boreholes in the Maurice Ewing Bank, these boreholes proved the existence of potential oil source rocks in the area.

Speculative seismic data - 1977-2001

1977-78 - two speculative, regional seismic surveys shot by Western Geophysical and GSI - some 21,652 km of data.
1993 and 1994 - Geco-Prakla and Spectrum acquired regional reconnaissance speculative seismic data both south and north of the Islands respectively, with a combined total of 15,558 km.
1995 - Spectrum acquired infill speculative seismic data over their original reconnaissance grid to the north of the Islands; this infill survey comprises 3,650 km of data with a five kilometre spacing between lines.
1997 - Spectrum acquired a grid of seismic data over the Special Co-operation Area , infilling the original regional reconnaissance grid laid down by Geco-Prakla. These data were reprocessed by Spectrum in 2000, and provide excellent quality data over the SCA region.
Note: the Special Co-operation Area agreement, established in 1996, has been rescinded by Argentina. Acreage on each side of the line designating the western edge of the Falkland Islands Designated Exploration Area that was formerly covered by the SCA agreement has therefore now reverted to the control of the relevant national jurisdiction.
2001 - Lundin Oil acquired 1,250 km of seismic data over the unlicensed area immediately north of Tranches A and B in the North Falkland Basin in lieu of a well in Tranche F, but are available for purchase (from Talisman Energy) by companies interested in applying for licences in that area under the open-door licensing policy being pursued by the Government.

Argentine wells - 1980-1994

Exxon, YPF and Oxy drilled 17 wells were drilled in Argentine waters of the Malvinas Basin
The geology of these wells has been summarised by Galeazzi (1998).
Five wells had encouraging shows of oil and gas in an under-charged Lower Cretaceous reservoir.
The Calamar x-1 well flowed about 3,200 barrels of 37° API oil per day.
A well drilled in late 1994 in the San Julian Basin to the northwest of the Islands is reported to have had oil shows within a 300 m thick reservoir interval.

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Falklands production licences - North Falkland Basin

1996 - seven Production Licences were awarded (to 14 companies) in the North Falkland Basin as a result of a competitive bidding round. The licences covered 48 blocks (some 12,800 square kilometres).
1999 onwards – several phases of relinquishment and operator changes to original licence areas in North Falkland Basin.
November 2004 – two new licences covering 16 blocks in the southernmost part of the North Falkland Basin awarded to Rockhopper Exploration.
April 2005 - two new licences covering 6 blocks in the northern part of the North Falkland Basin awarded to Rockhopper Exploration. These 6 blocks were previously licensed to Shell and Agip.
August 2008 - a new licence covering 2.25 blocks in the southern part of the North Falkland Basin awarded to Desire Petroleum in association with Arcadia Petroleum.
Current North Falkland Basin operators are Desire Petroleum, Argos Resources and Rockhopper Exploration. Rockhopper also partner Desire in two of their licences, and Arcadia partner Desire in parts of three of their licences.

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Falklands production licences - South Falkland Basin

2001 – ten Production Licences awarded covering 232 blocks over the southern area to the Falklands Hydrocarbon Consortium (Falkland Oil and Gas Ltd and Hardman Resources), with Falkland Oil and Gas Ltd (FOGL) as operator.
2003 – two licences and 37 blocks (90 blocks in total), relinquished by the Falklands Hydrocarbon Consortium (Falkland Oil and Gas Ltd and Hardman Resources) in the southern area as per licence conditions.
2004 – Five licences awarded covering 80 blocks over the southern area to Borders and Southern Petroleum Ltd.
2004 - A further seven licences, covering 195 blocks over 7 Quadrants in the Falkland Plateau Basin were awarded to Falkland Oil and Gas Ltd in December 2004. Unlike the other acreage held in the southern basins by FOGL, Hardman Resources do not partner them in these new licences.
2005 - FOGL/Hardman relinquished a further 18 blocks as per their licence agreement.
July 2006 - FOGL relinquished 50% of their licence holding in their 2002 licences held in conjuction with Hardman Resources. This relinquishment was required by the Falkland Islands Government in exchange for changes to the agreed work programme.
The Government proactively extended Phase 1 terms of "Open Door" licences, principally to accommodate drilling in Phase 1. Phase 2 was also extended in order to facilitate longer-term planning.
September 2007 - FOGL were required by Government to relinquish PL030, followed by, in December 2007, 25% of the remainder of their 2004 licences. BHP Billiton farmed into all the FOGL acreage, and agreed to drill one well in the 2002 licences during Phase 1, one well in the 2004 licences during Phase 1, and one well in each set of licences during phase 2 if they opt to enter Phase 2.

Open door licences awarded in 2001 — Open door licences after first relinquishment — Open door licences status November 2004 — — Open door licences status December 2004 — Open door licences status August 2008

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The Falkands Offshore Sharing Agreement (FOSA)

FOSA was established before drilling in the North Falkland Basin, and disbanded in 1999.
FOSA comprised Shell, Amerada Hess, Lasmo and IPC and their respective partners.
FOSA undertook all of the logistics and support work to facilitate a multi-well drilling campaign in the North Falkland Basin.
FOSA was managed through a steering committee composed of each operating company.
Each company also took direct responsibility for one or more aspects of the FOSA agreement:

drilling services (managed by Amerada Hess);
the operations base and supplies (managed by Lasmo);
health and safety issues, aviation and site survey work (all managed by Shell);
environmental work (managed by Lasmo);
finance/tax (managed by Amerada and Lasmo).

FOSA managed the sharing of a single rig, supply base, aviation link, site survey facility and operations/logging staff.
FOSA resulted in savings of over £24m per company.
FOSA provided:

a larger pool of expertise than could be provided in-house;
greater flexibility than if each company were mounting a single or two well drilling operation;
a reduced manpower requirement;
a unified voice on many issues;
companies with enhanced bargaining power when dealing with suppliers;
a minimal operational/manpower impact on the community;
a huge amount of knowledge in terms of environmental protection and associated monitoring.

A copy of the FOSA exploration closeout report can be downloaded here

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Wells drilled in the 1998 campaign

Six wells were drilled in the North Falkland Basin in 1998. These wells are all we know about the geology of an area half the size of Texas.
Most of the six wells were drilled within 38 km of each other.
All six wells were drilled back to back using a single rig.

Well results

Well results table

Five wells had shows.
One well recovered live oil to surface from a Lower Creataceous lacustrine petroleum system.
One well recovered gas to surface from a ?Upper Jurassic/Lower Cretaceous petroleum system.

Drilling Conditions

Drilling conditions are easy.
The weather conditions are surprisingly benign.
A 3000m dry hole can be drilled in less than 20 days.
Offset drilling data are available.

Post-mortem analysis - Hess well 14/09-1

Hess well 14/9-1 was the first well in the basin.
It tested a small culmination on an intra-basinal high – a small part of a much larger structure.
The well targeted a Lower Cretaceous sandstone above the source rock (a Low Velocity Zone).
The upper part of the source rock is immature, and acts as a regional seal.
The well would have been better targeting the larger, shallower part of the intra-basinal high immediately to the south of the drill location, but this was in Lasmo acreage

Post-mortem analysis - Hess well 14/09-2

The second Hess well was designed to target the hangingwall to the east of the same intra-basinal high as drilled by well 14/9-1.
However, the well was drilled on the footwall, west of a roll-over in the hanginwall.
It tested essentially the same as the first Hess well.

Post-mortem analysis - Shell wells 14/05-1 and 14/10-1

The first Shell well was targeted on a Lower Cretaceous delta that prograded from north to south along the basin axis.
As with the first Hess well, good quality reservoir were found above the immature, top part of the source, which acts as a regional seal for the underlying, mature source rock below 2800m.
The second Shell well targeted a low stand fan developed in front of the delta.
It had the same reservoir target as all the other wells.
Live oil was recovered to surface from a deeper sandstone reservoir, at the TD level of 3000m.
The sandstone with the live oil was not tested because:
1. no structure had been mapped at TD level due to the poor quality of seismic data at this level
2. the oil price crashed from >$30 to <$10 during drilling, and the project was therefore abandoned.

Post-mortem analysis - Lasmo well 14/13-1

The Lasmo well targeted the same Lower Cretaceous reservoir as the other wells, sitting above the regional source–seal couplet.
The well lost its mud into a fractured dolomite high in the section, and collapsed before logging could be completed.

Post-mortem analysis - Lundin well 14/24-1

The Lundin well was drilled on a low-amplitude feature with apparent four-way dip closure,
Post mortem re-mapping reveals that the structure did not close, and was therefore not valid.

Post-mortem conclusions

A post-mortem study of all six wells reveals that they all targeted the same wrong play concept.
The principal target in all six wells was an Aptian (Lower Cretaceous) sandstone immediately above a low velocity zone (LVZ).
The play concept relied on vertical migration from the LVZ claystone up into the overlying sandstone.
Shows of oil, migrated from a deeper, mature source were found in five of the six wells.
But, in all wells, the principal target was under-charged.
The LVZ is not over-pressured (and therefore fractured), but full of organic carbon, which causes the low seismic velocity.
The top of the LVZ claystone is immature source rock, and forms an excellent regional seal.
Only the basal part of the LVZ claystone (below 2800m) is mature source rock.
There are only poor vertical migration pathways at the tested localities.
Better targets/play concepts exist on more lateral migration pathways, or where the source-seal couplet is fractured.
Plays on lateral migration pathways were not tested at all in the first drilling campaign.
New play concepts rely partly on reservoirs not even targeted in the first drilling campaign.
The Lower Cretaceous lacustrine source has expelled over 100 billion barrels of oil.
Four of the six wells were poor tests for one reason or another.
Two independent petroleum systems were proved.
Live oil was recovered to surface from one petroleum system, and gas from another.
The are many more things to be tested in the basin – nowhere near sufficient data are yet available to understand the basin.