The science behind Falklands oil exploration

Coast south of Middle Peak, Pebble Island, showing exposures of sandstone

Regional geology

Aerial view of part of a stone river on Mount Vernet, near Estancia, East Falkland

There has been a lot of recent interest in the oil exploration taking place around the Falkland Islands. Here, Dr Phil Richards, BGS Regional Hydrocarbons Manager, answers some questions about the scientific background to the story.

What is it about the geology that suggests there may be oil around the Falklands?

For an area to be an oil province it needs to have a number of geological ingredients, all of which must have come together at the right time, and in the right order.

Firstly, there needs to be a basin area (or areas) i.e. a structurally controlled depression within the Earth’s crust — that has been able to accumulate several kilometres of sedimentary rocks. Within this sedimentary succession there needs to be an alternation of organic rich claystones, porous sandstones and impermeable claystones or evaporite rocks, deposited in the right temporal and spatial order.

Breakdown of organic matter

The organic material entrapped as fossils and plant debris within the organic rich claystones, if it is buried sufficiently deeply by succeeding layers of rocks — generally to about 3 km of depth — it will begin to breakdown, and to release liquid hydrocarbons from the hydrogen and carbon molecules within the organic matter. These liquid hydrocarbons can then migrate through the overlying rocks, upwards, towards the surface, and the region of least confining pressure.

Claystone cap rocks

Once the migrated hydrocarbons pass into a porous sandstone, they displace the water that is present in the pore spaces between the sandstone grains, and hopefully form an oil-soaked sandstone, known as the reservoir. However, the oil could simply pass through any such sandstones, and continue to migrate towards the surface.

However, if the sandstone layer has been deformed, for example into an anticline structure — a buried mountain beneath the surface — or has been cut by a geological fault that cuts off the migration pathways, then the oil may be trapped in the reservoir. However, it could still potentially leak vertically to the surface.

In order to prevent loss of the hydrocarbons to the surface millions of years ago, the reservoir sandstone will need to have been overlain by an impermeable layer of rock — a claystone or evaporate deposit — known as the seal.

Analysing seismic data

These conditions are a requirement for the formation of oil provinces everywhere, and we can interpret, from extensive remote sensing surveying such as provided by seismic data, that the general structural conditions and sedimentary rock thicknesses exist in the basin areas around the Falklands, just as they do, for example, in the North Sea.

1998 drilling results

We have also proven, from the results of six wells that were drilled in the basin north of the Falklands in 1998 that all of these geological elements are in place.

Why wasn’t the drilling in 1998 a success?

The 1998 drilling was a technical success in so far as it proved the presence of the necessary ingredients for what we call an active petroleum system, but only limited amounts of hydrocarbons were discovered. Although oil did flow to surface from one of the wells, there was only about two litres of it, and it was therefore a non-commercial find.

Why are oil companies investing in further exploration?

We all learnt a great deal about the geology of the Falklands petroleum system from the drilling in 1998, and can now take that knowledge and target exploration boreholes to test potential reservoirs and traps that we think are on the optimum migration routes taken by the oil as it moved through the geological system.

What are the chances of success this time around?

That varies from prospect to prospect and from basin to basin, but generally the chances of success range from about 10% to 20%.

We calculate the chances of success by assigning the various geological parameters — source, migration, reservoir, trap and seal — a probability of being present, and then we multiply the figures together to quantify the risk. It’s not a particularly precise science, but it’s as good as it gets at this stage of exploration.

If an exploration borehole finds an oil column, does that mean it is a commercial success?

Unfortunately, not necessarily. We would first need to establish the potential rate of flow of oil from the reservoir, and then to examine how much it would cost to develop the necessary infrastructure — more wells, production systems, etc. — to extract the oil. The flow rates would need to be tested, and the size of any find would need to be evaluated by further drilling.

How big are the potential reserves?

We quite simply don’t know at this stage.

There may be absolutely nothing there, and yet there could be billions of barrels. Although many extravagant figures have been quoted in the press, it is far too early to speculate.

60 billion barrels of reserves has been quoted in the media?

There appear to be two sources for this story:

The first is that, following the 1998 drilling campaign, I published (with a colleague from Shell) a geochemical analysis suggesting that the source rock in the basin north of the Falklands could have been capable of generating and expelling anything from about 1.2 billion barrels of oil to over 60 billion barrels of oil.

However, that’s an analysis of the amount of oil that may have been generated from the source rock. Only a very small percentage — maybe 10% — of any such hydrocarbons are likely to make it into a reservoir rock, and even if they do, and haven’t all leaked to the surface millions of years ago, only about 35% of that oil is likely to be extractable from the reservoir.

The second source, of a 60 billion barrels figure, is from one of the oil companies exploring in the basin to the east of the Islands. They estimated all the probable and possible reserves that may exist in the undrilled, un-proven prospects they have identified from seismic interpretation and have suggested that, with a large dose of good luck, there could be 60 billion barrels there. But the figure has to be taken in the context of the lack of firm observational data from that area: there are no wells there, and we simply don’t know yet what the geology is like there.

Falklands oil and the approach of Peak Oil?

Peak Oil is the point at which the world will have produced more oil than is left to produce. Estimates of when this will occur range, generally, from early this century to about mid-century, but in essence, we are at or about Peak Oil now.

It’s impossible to know whether Falklands oil could slow the approach of Peak Oil in any meaningful sense, as we don’t know if there is any oil.

However, we can put Falklands exploration into the context of our ever increasing demand for hydrocarbons. The world consumes about 100 million barrels of oil every day. The Liz prospect, the first target being drilled in the Falklands, may contain, according to the drilling company Desire Petroleum, 390 million barrels of recoverable oil. Whilst such reserves would transform the finances of the company, and be vitally important to the economy of the Falklands, they would satisfy world oil consumption demands for less than four days, and so are likely to have a minimal impact on the approach of Peak Oil.

Further information

Phil Richards has published over 50 papers on geology relating to oil and gas exploration which are listed in the BGS library catalogue