Falklands' new dawn: islanders plan future around oil

Aurora · Post by **Aurora** » 29 Jan 2009, 09:16

The Guardian - 29/01/09

Falklands' new dawn: islanders plan future around 18bn barrels of oil

Early evening chatter in the Victory bar in Port Stanley used to touch on squid hauls and cruise liner schedules. Now, as the locals sip on imported pints of British beer, a far more lucrative proposition is grabbing their attention: oil.

According to the latest seismic surveys, the Falkland islands are sitting on an estimated 18bn barrels. Prospecting companies operating on the islands say they plan to start drilling later this year. With an already affluent population of about 3,000, Falklanders are anticipating a windfall that could make them one of the richest populations on the planet.

Article continues ...

Ben · Post by **Ben** » 29 Jan 2009, 09:38

If it comes to anything good luck to them - and I hope they get their cinema!

I expect, though, they'll be needing others to defend their oil for them if they want to keep it. Though I suppose they'll have the money to pay. Discovering oil can be a mixed blessing.

DominicJ · Post by **DominicJ** » 29 Jan 2009, 10:02

18billion barrels at $20(profit) a barrel is $360b

The Falklands gets 30% of that, so $108b, about £83b

A Eurofighter costs about £70m, same again for ordanace and service life parts.
16 of them could be had for £2.24b.
I cant imagine the RAF would mind supplying the pilots if the Falklands bought the planes off them.
Takes no extra building at Mt Pleasent, and they could sink every Argentine Frigate and down every Plane on a single flight.
3% on defence isnt a bad deal.

PS_RalphW · Post by **PS_RalphW** » 29 Jan 2009, 10:06

By far the most expensive part of a fighter jet is the combat-ready pilot.

DominicJ · Post by **DominicJ** » 29 Jan 2009, 10:32

RalphW
Have you seen what a fighter pilot earns?
I suppose theres training costs.

Post by **clv101** » 29 Jan 2009, 11:03

Haven't we had a Falkland Island oil report every year for the last couple of decades... with nothing coming of it? I won't hold my breath.

DominicJ wrote:RalphW
Have you seen what a fighter pilot earns?
I suppose theres training costs.

The pilot's salary is one the smallest costs. Fuel for a single Eurofighter training flight (several thousand litres) is probably more than he earns in a month.

DominicJ · Post by **DominicJ** » 29 Jan 2009, 11:09

£40k an hour rings a bell, although that may have been the tornado.
Fortunes have been spent on the new flight simulators / trainers to make flight time as limited as possible

PS_RalphW · Post by **PS_RalphW** » 29 Jan 2009, 11:37

Of course the pilot earns a pittance.

It costs tens of millions to train a fighter pilot. They start in normal single engine prop trainers, move to twins, trainer jets, then second line and first line fighter jets. Each plane takes dozens of mechanics and engineers to keep airworthy and flying, and large amounts of paperwork. It takes several years to train a rookie up to combat readiness. They then have an active duty of maybe 10 or 15 years (if they don't leave to become commercial pilots or mercenaries at five times the salary).

I have worked with fighter pilots on an MOD airfield.

biffvernon · Post by **biffvernon** » 29 Jan 2009, 12:17

Getting a bit sidetracked here. There is approximately zero probablility of fighting another war down there. What will count is the oil production cost.

Billhook · Post by **Billhook** » 29 Jan 2009, 12:36

To work on an oil rig in the southern winter, off the Falklands, I'd need a really extreme salary.
I guess the rigs' insurance costs would be similarly extreme.
Then there's the investment in an oil terminal's construction, for loading tankers at the end of the pipeline.

And after that there's the risk of Argentina reverting to military adventures if there's something extant worth having . . . .

And then there's the uncertainty over the coming decade's oil demand . . . .

Good plot for talking up the pound mind.

Regards,

Billhook

DominicJ · Post by **DominicJ** » 29 Jan 2009, 12:58

Currently, it looks impossible, but in the future, an oil rig in the south atlantic during winter is likely to be unpleasent, compared to today.
If its a choice between that and homelessness and starvation, it doesnt look so bad.
I know they've looked at it a lot for the north atlantic, as far as buying up old frigates and using them to tow away iceburgs.
The article reckons its economic at $20, I would asume that includes port infrastructure.

Personaly, I just dont see how the Argentinians could ever threaten the Falklands again, without a massive rearmament program anyway, their airforce, literaly, consists of what we didnt shoot down last time.
However, my confidence isnt shared by people who should know more than me.
But if the oil price goes up to $150 and we exploit the Falklands, no one would think twice about deploying a full brigade to protect them, probably cheaper than the jets actualy.

emordnilap · Post by **emordnilap** » 29 Jan 2009, 17:19

I'd guess the price of oil will have to go up considerably to make this find worthwhile - otherwise, why has it not already been started? $20 dollars sounds remarkably cheap for such a hostile environment.

And don't forget, oil finds, prior to actual extraction, are always grossly exaggerated - and during extraction, how big a percentage actually comes out of the ground?

DominicJ · Post by **DominicJ** » 29 Jan 2009, 17:43

Oils not been over $20 for that long, and its only recently people have started saying it'll be over it for a while.

Cabrone · Post by **Cabrone** » 29 Jan 2009, 22:03

Operating conditions for a rig in the North Falklands Basin is akin to the N.Sea, certainly not a picnic but not as harsh as you would think.

Initial exploration wells were drilled by Shell in the Falklands winter of 1998 but they all turned out to be dusters. Does go to show that rigs could operate there even in their winter though.

The prospecting areas to the south and east of the islands are deep water and much more wild so will be a bigger technical challenge.

As for the Argentines, I just cannot see them repeating 1982.

Sure they will moan and grumble but I wouldn't be surprised if they got a slice of the pie via something like refinery operations. Besides which, I think they are prospecting their own areas down there.

This is of course assuming that there is any oil down there atall.

However by all accounts the seismic of the NFB is supposed to be very good, both for crude and gas plays.

careful_eugene · Post by **careful_eugene** » 30 Jan 2009, 09:48

Where's RGR when you need him? He could tell us all we needed to know about this