Hazy horizons off southern Europe

Recent reports that the Portuguese government plans to open virgin tranches of deepwater acreage on the country's outer continental shelf to exploration license bidding next year-drilling could begin in 2004-will doubtless brighten the picture of otherwise low prospectivity being presently painted for Offshore Southern Europe.

Recent reports that the Portuguese government plans to open virgin tranches of deepwater acreage on the country's outer continental shelf to exploration license bidding next year-drilling could begin in 2004-will doubtless brighten the picture of otherwise low prospectivity being presently painted for Offshore Southern Europe.

Adding a swathe of unexplored acreage to the radar screens of those international oil companies still eyeing up the lesser of Europe's offshore regions would be a leap forward for Portugal-and the region as a whole. The country's government introduced legislation in 1994 to spur exploration, but 5 years passed before it struck a deal with Norwegian contractor TGS-Nopec AS to shoot 16,000 -line-km of 2D seismic over the region's deeper water.

Early processing of seismic data suggests direct hydrocarbon indications in the offshore province. European operators, including BP PLC, TotalFinaElf SA, Agip SPA, and Repsol-YPF SA are said to be interested, with the Spanish company having signed up for a preliminary reconnaissance license so as to study the area before committing to seismic or drilling work.

Southern Europe E&P

Deepwater Portugal is one of four offshore areas identified by Wood Mackenzie Consultants Ltd. in its latest survey of southern Europe's upstream sector as likely contributors to future E&P activity. Of the other three-Greece, Turkey, and Spain-Spain looks the strongest candidate to create at least some low-level exploration excitement.

Though the Spanish offshore sector has been well explored-some 200 wells drilled over the last 35 years-a seismic shoot completed this year by Fugro Geoteam AS over the areas around the Canary Islands archipelago in Spanish territorial waters could attract attention, say the Edinburgh-based analysts.

WoodMac points to geological studies showing that thick Mesozoic sections observed in the Souss Basin off nearby Morocco extend to the Canaries as reason for guarded optimism in the area's future.

Ongoing political wrangling over continent shelf rights in the Aegean Sea between Turkey and Greece continues to hamstring acreage awards by the latter. This is a particular frustration for Greece, suggests WoodMac, because the area has arguable prospectivity in the post-orogenic Paleogene to younger Neogene basins, where Tertiary sediments up to 3,000 m in thickness can occur, and reservoir trap types-roll-over anticlines and tilted fault blocks-have been identified.

Although not part of Europe but part of the Mediterranean province, Turkey has licensed new acreage off its southern Mediterranean coast, and state-owned Turkish Petroleum AO has partnered with foreign companies, including Romania's Petrom and Houston-based El Paso Corp., to explore the area. Drilling-waiting on completion of seismic-could begin later this year.

New discoveries needed

Setting aside the longer-term future of E&P off southern Europe, the immediate challenge is to make the most of those fields already developed. Technologies including extended-reach drilling are making their mark through successes, for one, around the Casablance oil complex off Spain by tying in production from satellite fields such as Boquerón and Barracuda, and Repsol-YPF continues to drill one or two prospects a year at Casablanca.

Technology-as throughout the offshore oil and gas industry-may save. But for how long? WoodMac believes that, without new large-scale discoveries, the decline of southern European production will soon accelerate and eventually cease altogether, perhaps as early as 2006.

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