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Exploration for oil offshore the Falkland Islands is at a very early stage and no commercial discoveries have been made yet.

Six wells were drilled to the north of the Islands in 1998 by Shell, Amerada Hess, Lasmo, Lundin Oil and partners, resulting in a wealth of geological data. These first wells proved the presence of a very rich organic source rock that could generate up to 60 billion barrels of oil, and also brought oil to the surface in one well and found quantities of gas in another.

The Falkland Islands Government has strict environmental legislation regarding offshore surveying and drilling activities. Licensed areas are well away from the coastline and companies have to prepare environmental impact assessments and oil spill plans when planning drilling activities. In order to safeguard the Falklands fishery, seismic surveys are restricted to specific times of the year. Oil companies operating offshore have been able to collect new oceanographic and wildlife data, enhancing knowledge of the area.

With high oil prices at present, the Falkland Islands has become a more attractive frontier area for exploration.  A number of new companies were licensed to explore for oil in 2004.

It is expected that oil companies will drill more exploration wells in the North Falkland Basin in 2006 following an 800 sq.km. 3D seismic survey completed by Desire Petroleum and a 2D survey to be carried out in the southern licensed blocks. If a commercial discovery is made in the next decade, production, oil companies explain, is likely to be by using floating production vessels known as FPSOs. Oil is taken directly from the FPSO by shuttle tanker to refineries around the world and there would be no requirement to bring oil ashore thus keeping impact on the Islands to a minimum.

An aeromagnetic survey was flown over the Islands in the first half of 2004 and onshore prospecting licence holders, Falkland Minerals Limited, commenced shallow drilling on identified targets in the summer of 2004/5. They are hopeful that they will find accumulations of gold and other metals. Modern mining legislation with required environmental and planning controls became law in the Islands in May 2005.

Published in the Penguin News Visitor's Guide 2005/6 sponsored by the Falkland Islands Tourist Board

www.penguin-news.com  www.tourism.org.fk 

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