WATCHING THE WORLD OIL, POLITICS MIXTURE REMAINS STRONG

With David Knott from London When Mackay Consultants, Inverness, U.K., compiled a report on worldwide offshore prospects recently, the dragnet caught just about everywhere with hopes of holding offshore oil. A glance through the list of "hopefuls" shows the well known pairing of oil prospectivity with hostile climate and/or sensitive political situation is set to continue.

July 19, 1993

3 min read

When Mackay Consultants, Inverness, U.K., compiled a report on worldwide offshore prospects recently, the dragnet caught just about everywhere with hopes of holding offshore oil.

A glance through the list of "hopefuls" shows the well known pairing of oil prospectivity with hostile climate and/or sensitive political situation is set to continue.

Tropical paradises fared badly. Bahamas has seen minimal interest according to Mackay: no drilling yet and none likely before 1995. Barbados produces 1,300 b/d of oil onshore with no offshore activity expected short term.

COLD CLIMATES

Cold, windy countries with settled political regimes have had mixed results. Greenland hoped to award its first licenses this year but received no offers in the round that ended Jan. 15. Companies have expressed interest in the area. Further licensing rounds are planned in 1995-96 and 1998-99.

The Faroe Isles, between Iceland and northern Scotland, is drawing up fiscal and licensing laws in hopes of reducing the dependence of a depressed economy on fishing. Mackay expects first seismic surveys late this year or in 1994.

Most hope seems to lie in political hot spots, either recent or current.

Costa Rica's government has drafted a law allowing foreign companies into the country for the first time. No exploration is expected before 1995, Mackay said. Likewise, Nicaragua's democratic government, elected in 1990, is considering establishing a legal framework for oil exploration.

Cuba's current licensing round closes Aug. 1. Due to a U.S. trade embargo, however, "...Americans are keen to stop foreign companies helping the Castro government and have entered claims on offshore acreage on which U.S. firms were operating before nationalization."

This is unlikely to stop foreign firms from drilling this year, Mackay said.

FORWARD THINKING

Argentina's 140 block rolling bid round, which includes 42 offshore tracts, is said to be behind schedule. Six offshore blocks lie near the Falkland Islands, where the government is organizing its own bidding round with U.K. help.

Mackay said only Lasmo plc, London, has been reported as negotiating directly with the Falkland Islands' government.

South Africa has decided to offer data packages on prospective areas to attract foreign investment. Mackay said all acreage licensed to Soekor Pty. Ltd. will be made available eventually, but fiscal changes are needed to make the area sufficiently attractive.

Perhaps most forward thinking is one major's venture in Croatia, formerly part of Yugoslavia. Amoco Dinarides Petroleum Co. signed a memorandum of understanding with state oil company INA-Industrija Nafte for exploration of three blocks, covering 27,000 sq km onshore and offshore.