A new island oil bonanza?
p. 23 · Read in the full issue
PNG IS LIKELY to make ASI.3 billion in exports from of its newly opened Kutubu oil field this year; an economic bonanza by anyone’s standards.
In Sydney last month a conference of over 1000 petroleum geologists was told Tonga, Fiji, Vanuatu and Solomon Islands have good potential for commer cial oil finds.
A campaign to sell those nations’ prospects has been launched by the regional institution SOPAC (the South
Pacific Applied Geoscience Commission)
with glossy brochures being mailed to
crucial prospecting companies.
The potential for a new boom in oil exploration has been made possible by technological innovation. Although most areas with potential for commercially
viable oil exploration were checked out by oil companies in the 1970 s and early 80s, new technology has made it possible to see oil bearing structures invisible to older methods.
Opening the door to new exploration will require the resolution of remaining claims by companies holding old exploration leases. In Fiji that has already been done while in Tonga two new licences have been issued - one to a Japanese company and one to an American one. Those companies will be prospecting in the shallow water between Tonga’s main island of Tongatapu and Eua Island, and in the north between the Ha’apai and Vava’u groups of islands.
Interest in oil production in the island nations was first awakened back in 1968 when four oil seeps (areas where oil bubbles to the earth’s surface), were found on Tongatapu. Although these seeps are on land the reservoirs which feed them are offshore.
In each of the island nations currently thought to be good prospects commercial deposits would be found in shallow offshore areas.
In Fiji, Bligh Water has been confirmed as having underwater seeps, in Vanuatu the best possibilities lie in shallow water along the east coasts of Santo and Malekula and in the Solomons in four shallow basins including the Iron Bottom Sound, just off Guadalcanal.
In all these areas the seafloor would need to be less than 200 metres from the water surface.
With island oil and gas reservoirs expected to be relatively small, water any deeper than this would push already huge drilling costs to uneconomic levels.
While shallow water has its advantages for drilling it has big disadvantages for the environment.
It is usually near to sensitive coral reefs and fishing grounds and to the coastlines along which people live. It is also close to shore-based mangrove swamps and other
areas used as breeding grounds by many marine species.
In fact the environmental stakes in oil development are just as high as the financial stakes.
Oil spills, as we have seen from the Exxon Valdez disaster in Alaska, can spread their destructive ten tacles across hundreds of square kilometres.
The authority’s spokesperson, Craig Sambal, says worst case disas ters come not from tanker accidents but from oil rig blowouts. That’s when a fault develops with the valve system which controls the flow of oil, allowing pressure to build up and eventually explode. The result is an uncontrollable oil gush.
For small island nations this sort of problem presents
particular difficulties.
Neither the country nor oil company is likely to have the money to have a full range of containent equipment on hand. Flying it from overseas could lose valuable time and in many cases would be quite difficult with large booms and pumps having to be shipped from the nearest
big airport.
While blowouts are rare, other smaller problems are not. Marine life is highly sensitive to oil. As Craig Sambal puts it “if it comes in contact with with coral it’s ‘good
bye coral’”.
In Australia the Great Barrier Reef Marine Park Authority has been tackling the damage done by the tiny amounts of oil dumped out in the bilge water of commercial shipping. If this is having an impact the dangers associated with an oil rig are easy to see.
People reliant on nearby fishing grounds and their national governments are likely to face some difficult dilemmas when they come to decide just how far traditional rights over marine resources can be said to extend and what sort of compensation may be necessary.
Another problem is the integrity of oil companies. Of around 200 oil production companies working the world’s frontier areas, some industry sources suggest only 100 could be trusted to stick to legislation or agreements signed with partner governments. The better known and more reputable companies may be more willing to stick to agreements but will not hesitate to push for the most advantageous interpretation of any clean-up or safety requirements.
With each oil rig built taking time and sometimes hundreds of millions of dollars of investment to put in place, petroleum production is the big league.
Small countries would not be able to find the money necessary to mount a major clean up if a company fell short of the standards expected of it.