FALKLAND ISLANDS OFFSHORE OFFERS HIGH RISKS COSTS, GOOD POTENTIAL

Philip C. Richards
Nigel Fannin British Geological Survey
Edinburgh

The recent seismic surveys in Falkland Islands waters by GECO Prakla and Spectrum have encouraged substantial oil company interest in this new exploration area.

An exclusive licensing round, based on competitive work programs, is expected to open in second half 1994 and close in early 1995. The timing of the round will allow oil companies 6 12 months to procure and interpret the data and make representations to the Falkland Islands government over blocks to be offered.

Work programs required for the first round may allow a seismic infill phase in the first instance, but leading to drilling should results merit.

Awards are likely to be made for a combination of large tranches of acreage and smaller, single blocks using a model similar to that used in the U.K. to the west of Shetland and in the North Sea, respectively.

The fiscal terms and conditions relating to exploration and exploitation have yet to be finalized. However, it is expected that provisions will recognize the frontier nature of the area and will be designed to encourage operators fully to explore leased areas.

The new seismic surveys are a considerable improvement on existing data acquired in the late 1970s and extend up to 380 km from the Falkland Island coast. The surveys cover all of the area in less than 1,000 m of water, with much of the data from less than 200 m. The combined survey is probably the largest speculative shoot ever undertaken in a single season.

The seismic surveys and other aspects of exploration in the area are being managed by the British Geological Survey, technical consultants to the Falkland Islands government. The BGS has liaised closely with GECO-Prakla and Spectrum to ensure full coverage of the most prospective areas, thought to be Mesozoic and Cenozoic basins occupying about half of the Falkland Islands Designated Offshore Area.

GENERALIZED GEOLOGY

The Falkland Islands comprise a suite of relatively indurated Devonian to Permian sediments similar to those of Southern Africa, to which the Falklands plateau was welded before the breakup of Gondwanaland in the early Cretaceous. Separation of Gondwanaland and the southwestwards continental drift of the Falklands was preceded by significant rift extension, with the formation of a number of major basins around the Falkland Island microplate.

The geometry of the offshore basins @as modified by strike slip movement, with attendant rejuvenation and reactivation of fault systems during basin evolution. The major strike slip faults were probably active throughout much of the southwestwards continental drift of the area and may have been the sites of major lateral translations and micro plate rotations.

The structurally complex extensional and pull apart basins surrounding the islands were infilled by clastic material shed off the Falklands block and adjacent landmass, providing potentially excellent Mesozoic and Cenozoic reservoir and source rock sequences.

Approximately 200,000 sq km of the Falkland Islands offshore area comprises possibly prospective sedimentary basins (Fig. 1), compared to abouty 160,000 sq km in the U.K. North Sea.

The Falkland Islands shelf must therefore be considered to be an area of significant hydrocarbon potential if only for the size of the several unexplored basins that are described below.

FALKLAND PLATEAU BASIN

This basin lies to the east of the islands and covers more than 116,000 sq km within the Falklands Designated Area. It extends eastwards into international but much deeper waters and contains up to 7 km of Mesozoic to Cenozoic sediment near the eastern limit of the Falkland Islands Designated Area.

The stratigraphy of the eastern part of the basin has been sampled by three boreholes on the Maurice Ewing Bank several hundred kilometers to the east of the islands. These boreholes were drilled in the 1970s as part of the Deep Sea Drilling Project.

There are proven source rocks capable of generating fight naphthene and paraffinic oils, gas, and condensate in the DSDP boreholes. Late Jurassic claystones in the boreholes contain terrestrial and marine organic material with up to 5% total organic carbon (TOC) and a potential hydrocarbon yield of around 25 kg of hydrocarbon/ton of rock.

Lower Cretaceous euxinic claystones exhibit the same TOC enrichment as the Jurassic samples. Contra to published accounts, these potential source rocks are probably still immature over the Maurice Ewing Bank, retaining the potential to be mature in the more deeply buried areas towards the west, closer to the Falkland Islands.

Devono Carboniferous, Lafonian Supergroup (Permo Triassic), Mesozoic, and Cenozoic sediments occur in the Falkland Plateau basin. Each system could contain potential reservoir rocks, although the only reservoir rocks encountered in the DSDP boreholes over the Maurice Ewing Bank were of mid to late Jurassic age.

Transgressive sandstone intervals, which may not extend onto the Maurice Ewing Bank, may have developed at several horizons throughout the Mesozoic and Cenozoic, particularly in conjunction with the widespread unconformity surfaces recognized over much of the area.

Transgressive sandstones are likely to be capped by thick argillaceous sequences and will probably therefore be adequately sealed. Major faults cutting the sedimentary interval generally terminate upwards within the Jurassic interval and are unlikely to provide vertical breaches of younger sealing horizons.

The numerous half grabens and tilted fault blocks probably result from Jurassic extension preceding southwards continental drift of the area away from South Africa. As such, the basin represents an early, failed rift system that developed before separation of Gondwanaland, probably due to micro plate rotation around a Euler pole near the southern tip of Africa.

The main risk factors associated with the Falkland Plateau basin are the presence of suitable reservoir rocks and trapping mechanisms. Source rocks and seals are considered to be adequate.

MALVINAS BASIN

The Malvinas basin lies to the west of the islands and covers some 27,000 sq km within the Falklands Designated Area. It extends westwards into Argentina waters, where areas are currently under license to Total, Occidental, and Norcen, or on offer as part of Argentina's "Plan 92."

The basin covers up to 2 km of Mesozoic and 5 im of Cenozoic sediment, with the thickest fill adjacent to the southern bounding fault. The basin's steers head shape and structural configuration, with three discrete structural provinces, probably results from a combination of post Middle Jurassic extension in an east west direction, coupled with strike-slip related pull apart during the sinistral movement of the southern bounding fault that separates the South American and Scotian plates.

There have been 46 discoveries or shows in Argentine waters in the onshore Magallanes basin and the connected offshore Malvinas basin, including 13 oil and gas, 16 gas, and two condensate. These discoveries are in the Lower Cretaceous Springhill formation, the Upper Cretaceous Arroyo Alfa formation, and more rarely in fractured jurassic volcanics. Four of the discoveries are potentially commercially viable.

Hidra oil field, located southeast of the Magellan Straits, had estimated original oil in place of about 133 million bbl and recoverable reserves of 44.03 million bbl of oil. Two satellite fields, Hidra Sur and Ara, produce via subsea completion facilities.

Hidra is a relatively small field, and early interpretation of the new seismic data off the Falklands suggests that the structures there may be larger than those around Hidra.

The main source rocks are possibly Upper Jurassic and Lower Cretaceous mudstones. They are likely to be thickest and most deeply buried in the zone adjacent to the basin's southern bounding fault. Hidra field oil has a gravity of 38 with a high wax content, and Argentinian oils in general have API values higher than 20.

Much of the basin is underlain by Devono Carboniferous and Permo Triassic rocks similar to those forming the Falkland Islands and found beneath the Magallanes basin. These rocks could have the potential to form deep reservoir sequences, particularly if porosity has been enhanced by secondary porosity processes. Overlying these older sediments is a widespread, late jurassic to Cretaceous volcanic unit termed the Serie Tobifera. The volcanics are fractured in places and form reservoirs locally over the Rio Chico high on the western margin of the basin.

The main reservoir is the Lower Cretaceous Springhill formation (Fig. 2), a fluvial and transgressive sandstone deposited over the eroded basement topography. Albian to Cenomanian shallow water sandstones and Cenozoic low stand fan deposits of possible reservoir quality may also be present locally. The main reservoir intervals are likely to be similar to those in the Argentine sector and in the structurally connected Magallanes basin.

The reservoirs are overlain by thick successions of marine mudstones and siltstones that provide adequate vertical sealing potential. Lateral seals at the margins of sandstone onlap traps at the basin margin may be more problematical than the vertical seals.

Potential play types include:

/ The pinchout of Lower Cretaceous Springhill formation sandstones along the eastern margin of the basin;

/ Large tilted fault block traps in the terrace area about 75 90 km wide along the eastern margin of the basin;

/ Cretaceous and Cenozoic drapes over basement faults;

/ Folded Cretaceous and Cenozoic sandstones deformed by east west oriented strike slip faults and associated flower structures;

/ Wedge outs of Albian to Cenomanian sandstones;

/ Pinchouts of Cenozoic submarine fan deposits; and

/ Fractured jurassic volcanics overlain and sealed by Cretaceous or Cenozoic mudstones.

SOUTH FALKLAND BASIN

A basement ridge extends southwards from Cape Meredith at the southern tip of West Falkland towards the Burdwood bank but does not completely separate the Falkland Plateau and Malvinas basins.

The ridge plunges southwards, and Jurassic through Cenozoic strata thin onto it from east and west but are probably continuous over it. Thick Mesozoic and Cenozoic sequences are developed over the structurally lowest part of the plunging ridge, adjacent to the northern margin of the Burdwood bank. This basin may contain source and reservoir rocks similar to those in the Malvinas and Falkland Plateau basins.

The main play types in this basin are onlaps of Cretaceous sandstones northwards against the basement high and possible pinchouts of Cenozoic submarine fan deposits shed off the southern bounding fault.

There are possibly no source or reservoir rocks beneath Burdwood bank itself because of the high degree of probability of the area having been uplifted and deformed.

BURDWOOD BANK

The northern margin of the Burdwood bank is defined by a major strike slip/thrust fault at a plate boundary, while the southern boundary may conform to a continental oceanic crust transition coincident with the continental slope. The underlying crustal structure may represent a late Jurassic to early Cretaceous remnant arc.

There is some controversy regarding the nature of any sedimentary cover over the Burdwood bank, with estimates of the sediment pile ranging from about 7 km thick to only about 1 km thick.

The Burdwood bank may form an uplifted and eroded extension of the Magallanes fold belt observed onshore in South America and may now be stripped of Upper Cretaceous and Cenozoic sediments. Existing seismic data are not of suitable quality to resolve the debate.

NORTHERN BASINS

Several possibly structurally isolated basins (including the eastern extension of the San Julian basin, part of which is currently the subject of renewed exploration by BHP and Petrobras in Argentina waters) may lie to the north of the islands.

These basins may total some 46,000 sq km, although their actual extent is difficult to determine with the widely spaced seismic and gravity magnetic data currently available.

The possible eastern extension of the San Julian basin north of the Falkland Islands may contain up to about 5 km of jurassic to Cenozoic sedimentary infill. The dominant structural style comprises normal listric faults, although transpressional structures indicative of strike slip faulting are recorded.

The sedimentary infill, which has not been drilled, may be similar to either that of the Malvinas basin or the San Jorge basin (Fig. 2), with the possibility of thick source rocks and associated reservoirs.

The other apparently structurally isolated basins to the north of the Falkland Islands lie to the east of the San Julian basin. They are underexplored at present but have considerable petroleum potential given their tectonic setting and sedimentary succession extending to around 6 sec two way time. Much of the area of the basins lies in less than 200 m of water, making them an attractive exploration target.

The exact nature of potential source rocks here is unknown. If the area was isolated from a marine connection and the basins formed, as thought, as a result of pull apart processes, it is possible that they contain thick successions of lacustrine argillites capable of producing Type II oil prone kerogens.

Similar sediments of late jurassic to early Cretaceous age (the Aguada Bandera sequence) in the San Jorge basin are black and organic-rich, contain amorphous algae and carbonized plant remains, have TOC values of 0.5 4.0%, and are an important source, producing 20-30 gravity oils.

While there is a high risk and cost profile associated with exploration of the Falkland Islands offshore area, there is significant potential for the discovery of giant oil fields. This potential for high reward should be sufficient to encourage oil companies to commit the requisite funds to start the serious search for hydrocarbons in the area.