Watching the World: South Pacific oil ambitions

Sept. 19, 2005
O il and gas probably don’t figure in many romantic visions of the South Pacific.

Oil and gas probably don’t figure in many romantic visions of the South Pacific. But for people who live in the region, there’s a growing desire to develop domestic supplies.

Consider the Solomon Islands, 27,540 sq km of land dotting the Pacific east of Papua New Guinea.

The SI government, which believes the country has major reserves of oil and gas, said it soon will be seeking international investors.

Offshore deposits

SI Mining and Energy Minister Basil Manelegua said a survey in the 1970s and a more recent one by the South Pacific Applied Geoscience Commission indicate deposits of offshore oil and gas.

Manelegua said the deposits are in the Shortland basin, Guadalcanal’s Iron Bottom Sound, and between Isabel and Western Province.

“We have certain people approaching us on this investment,” he said, without naming names.

He said investors will have to determine whether the deposits are commercially viable, but he cautioned that his country would not be stampeded into anything.

“One thing I want to work on is to do a framework on the legislation first so that we can have a coherent and a conducive legislation in place for those who want to invest in these undertakings,” he said.

A wise observation, especially if any investors do come knocking. That’s not far-fetched, either, as Manelegua is prepared to issue a prospecting license to a Japanese firm as soon as there is agreement from landowners on Santa Isabel and Choiseul Islands.

The minister said that Japan’s Sumitomo Metal Mining Co. is keen to explore the islands to determine the extent of their nickel and cobalt deposits. He said that at two recent meetings on his home island of Santa Isabel last week, the local people were enthusiastic about the possibility of mining. Manelegua said the first step is a surface access agreement. If the prospecting results are positive, there could be a mine on Isabel in 5-7 years.

Nuts to fuel

Meanwhile, as it awaits legislation in preparation for the arrival of oil and gas companies, the SI government will test to see if fuel made from coconut oil could help provide electricity.

Manelegua said Pacific Island countries like the Solomons could save significantly on fuel imports by switching-at least in part-to coconut fuel.

He said testing is to begin on using the fuel to run some of the SI electricity generators.

“We are working on biomass: that is, the conversion of coconut oil to a diesel [fuel]. There is one company called STP Solomon Petrol Products which we will be signing a memorandum of understanding with,” Manelegua said.

“We will run a test with the SI generators for the next 6 months, and then after that we can work on how we can commercialize coconut diesel,” he said.

Nuts? Perhaps there really is a certain romance in the air out there, after all.