domingo, 8 de fevereiro de 2009

War profiteers

Irishmen Bryan Benitz and and Paul Griffiths are leading a company that is planning to profit from an occupation.

The Irish oil company Island Oil and Gas is working for Moroccan authorities in occupied Western Sahara, despite that UN has said it is illegal. The Sahrawis are protesting it, it is after all their country. No state recognise Morocco's claims to Western Sahara.

But the Irish company keeps planning operations in the occupied country.

On 28 January 2009, their 2008 annual report was launched. The report contains presentations of the 2 illegal licences.

It shows that Island as operator of the Tarfaya Licence, has currently completed a review of prospectivity and will now embark upon a seismic reprocessing programme to high-grade prospects for new infill seismic acquisition in order to define potential drilling locations.

It is also hinted in the report that the reconnaissance licence for the Zag basin might have been converted to an exploration licence in December 2008. Fugro Robertson have been finalising analysis of the Zag basin in occupied Western Sahara in 2008. The Fugro NV subsidiary Fugro Robertson was also engaged in Western Sahara in the period around 2004.

None of the letters that WSRW has sent Island Oil and Gas have ever been responded. Despite their insistence on violating international law and fundamental ethics, they claim in the annual report to be "responsible". The UN stated oil exploration in Western Sahara would be illegal if the local people was against it.

This is cut from the annual report:
Onshore Morocco, Tarfaya Permit
The Tarfaya Exploration Licence is located in Southern Morocco and covers an area of 13,434 square kilometres. It is located onshore and borders the coastline of the Atlantic Ocean. The Exploration Licence was awarded by ONHYM in November 2007 and is effective from 14 January 2008 for an eight year term divided into three work phases. ONHYM has the right to exercise a back-in option of up to 25%, reducing Island’s net interest to 30% if ONHYM were to exercise its back-in option to the maximum extent. State participation is carried only through the exploration phase with no
reimbursement for exploration costs.

The Phase 1 work programme for the licence is of 30 months duration and requires the acquisition, processing and interpretation of 500 kilometres of 2D seismic data and to conduct geochemical modelling. A drill or drop decision will be made at the end of the initial period.

Based on the existing seismic and well database in the Licence area, 15 exploration leads have been identified and mapped. There are two primary play types related to Mesozoic age reservoirs: Jurassic marine carbonate platform sediments and Triassic continental fluvio-deltaic red bed clastics. These occur at between 2,500 and 4,000 metres and 4,000 to 5,200 metres respectively. Fault- and dip-closed structures and anticlinal folds with four-way dip closure have been identified to date.

On-trend discoveries include the offshore Cap Juby Field and fields in the Essaouira Basin. Cap Juby is the nearest oil field on trend with Tarfaya and lies only 40 kilometres offshore from the Tarfaya Licence. The field was discovered in 1969 by Esso with the drilling of the MO-2 well. The well flowed 10 to 12 degrees API oil at a rate of 2,377 bpd from an Upper Jurassic fractured limestone at a depth of 2,076 metres subsea. A subsequent appraisal well on the flank of the structure encountered a small amount of light 38 degrees API oil from an older Jurassic limestone reservoir, thus proving the light oil potential of the area. Oil migrated and was trapped in the Cap Juby structure during the Middle to Late Cretaceous, however the structure was deeply eroded at the beginning of the Tertiary at which time the oil was biodegraded.

The Cap Juby field has not been monetised to date due to the heavy nature of the oil and the complex reservoir distribution. However, this proven oil play extends onshore into the Tarfaya Licence where the influence of Tertiary erosion is much less and the potential for the preservation of light oil in the
Jurassic is very high.

A total of seven discoveries in the Triassic and Jurassic intervals were made in the onshore Essaouira Basin, north of the licence area, including one oil field and two gas and gas-condensate fields.

The principle structural leads in the Tarfaya Licence are the Daora Structure, covering a probable area of 23 square kilometres and prospective for multiple targets in the Jurassic and Triassic; and the J North Structure, covering a probable area of 105 square kilometres with a primary reservoir target in
the Trias.

Netherland, Sewell and Associates have produced a Competent Persons’ Report for San Leon Energy Ltd, one of Island’s partners in the Tarfaya Licence, as part of that Company’s AIM Listing requirements, which gives, as of 1 May 2008, gross unrisked ‘Probable Prospective’ oil in place for the Tarfaya exploration leads of 2,511.5 mmb and gross ‘Probable Prospective Oil Resources’ of 711.3 mmb. It quotes gross unrisked ‘Possible Prospective Oil Resources’ of 3,878.6 mmb. For the J North Triassic Structure Netherland, Sewell and Associates prepared unrisked economics for the unrisked ‘Probable’ (‘Best Estimate’) development case of 156 mmb of gross oil resources. Using an oil price of US$80/barrel, this gave a gross unrisked value of approximately US$708 million discounted at 10% NPV. Netherland, Sewell and Associates have risked the chances of success for the J North Structure as 0.09%.

Island, the operator of the Tarfaya Licence, has currently completed a review of prospectivity and will now embark upon a seismic reprocessing programme to high-grade prospects for new infill seismic acquisition in order to define potential drilling locations.

Island will continue to prudently manage its exposure to the potential cost of the Phase 1 work commitment through farm-outs or the sale of equity interest in the Licence in order to accelerate drilling activity in this very prospective Mesozoic basin. As part of this process, and in order to secure an interest in this potentially valuable licence, in January 2008, during which time Island’s business growth strategy was constrained by the terms and conditions of Island’s outstanding debt facility with RMB, Island agreed with its partner in the Tarfaya Licence, Longreach Oil & Gas Ventures Limited (‘Longreach’), that Longreach would carry Island’s share of the Bank Guarantee (US$400,000), required to be put in place at the time of execution of the Tarfaya Licence, based on certain agreed terms and conditions as follows:

# Carry Longreach’s share of all costs incurred in relation to the Tarfaya Licence up to an amount equivalent to US$420,000 plus interest at 2% above Federal Reserve Rate;
# Grant Longreach an overriding royalty of 0.2% of gross monthly production, attributable to the Island interest, in any FSU licence it acquires jointly with its Moldovan partner Valiexchimp. In the event that none of these projects in the FSU were executed within one year of putting in place the Tarfaya Bank Guarantee, then Island would grant Longreach an overriding royalty, attributable to the net Island interest, of 0.4% of gross monthly production in the Tarfaya Licence and of 0.2% of gross monthly production in the Zag Reconnaissance Permit.

Onshore Morocco, Zag Basin
The Zag Exploration Reconnaissance Licence is located in Southern Morocco and covers approximately 21,807 square kilometres. The Licence was awarded on 12 December 2006 for an initial 12 month period. ONHYM subsequently granted a 12 month extension valid until December 2008 at which time a decision will be made to convert the Reconnaissance Licence to an Exploration Licence.

The current work programme includes reviewing existing studies; conducting geological field studies and a geochemical study; acquisition, processing and interpretation of aeromagnetic data; and the interpretation of satellite image data. The integration of these data will aid in high-grading areas for acquisition of a future 2D seismic survey to delineate leads and prospects.

The Zag Exploration Reconnaissance Licence lies within the Zag-Tindouf Basin of Southern Morocco and Western Algeria and is the westernmost of the prolific hydrocarbon-producing Palaeozoic Basins of North Africa. The Palaeozoic and Triassic reservoirs contain some 43% of known oil and 84% of the known gas resources of the entire North African region, with more than 460 billion barrels of oil equivalent of recoverable hydrocarbons discovered in 350 separate accumulations. The Zag-Tindouf Basin is predominantly a gas-prone hydrocarbon system. As a result of this the basin is poorly explored because historically it was considered remote and lacking production and transportation facilities. Large gas discoveries in Algeria and Libya, planned export gas pipelines to the European market together with the potential to transport gas to Morocco’s Atlantic Margin for conversion to LNG and export to the United States market, the lack of a strategic gas reserve and gas storage facilities in Morocco, the renewed political focus on security of supply issues, have revitalised industry interest in the Zag-Tindouf Basin, as demonstrated by the fact that Petro-Canada holds acreage immediately to the north of and adjoining Island’s licence interest.

The Zag-Tindouf Basin contains in excess of 8,000 metres of sediments and therefore the central parts of the basin have the potential to contain mature hydrocarbon source rocks. Despite this only eight exploration wells have been drilled in the Zag Basin, between 1961 and 1965. There is no indication that seismic data were ever acquired in this basin. Two wells encountered gas shows in the Palaeozoic. The Morcba-1 well, drilled in 1965, was classified as a gas discovery after testing 0.3 million cubic feet of gas per day (‘mm cfgpd’) from Silurian reservoirs at 650 metres.

The Zag-Tindouf Basin extends into Western Algeria and shares a common tectonic and sedimentary history with the Reggane Basin of South-Central Algeria. The Reggane Basin has been more extensively explored between 1957 and 2005. Gas has been tested from Ordovician, Lower Devonian and Carboniferous reservoirs, at depths between 1,500 and 4,500 metres subsea, at rates varying from 1.17 to 33 mm cfgpd. B.P. made two gas discoveries in 1980 and Sonatrach drilled ten exploration wells from 1995 to 2005 in the Reggane Basin. Estimates of discovered gas-in-place up until 2003 are 1.4 tcf (Petroconsultants). Repsol is reported to have drilled 13 exploration wells since 2003 in the Reggane Basin and to have made 5 gas discoveries with proved and probable resources in the order of several tcf.

From the available well data and surface rock outcrops, the Zag-Tindouf Basin is interpreted to contain the same prolific Silurian source rocks that are present in the Algerian and Libyan hydrocarbon-producing basins and to have sourced the gas discovered to date in the Morcba-1 well drilled in 1965.

The Zag Basin is in the earliest stages of exploration with drilling prospects yet to be identified. Initial geological studies by the Operator, San Leon Energy Ltd, have been completed and have demonstrated the presence of an active petroleum system. A 19,750 line-kilometre aeromagnetic survey will be acquired, processed and interpreted during the latter part of 2008. The objective will be to delineate deep basin structures over which 2D seismic will be acquired, subject to converting the Reconnaissance Licence into an Exploration Licence, to further assess the potential for the presence of fault block and folded anticlinal traps similar to those containing the hydrocarbons in the Palaeozoic oil and gas fields of Algeria and Libya. The Zag Basin in Southern Morocco has the potential to be a significant source of gas in North-West Africa, close to the European Market, in future years. Post year end, (October 2008) Fugro Robertson has completed for the Zag licensees a scoping economic analysis and feasibility study for a potential gas development in the Zag Basin. The results are positive and support the potential for the Zag Basin to make a significant contribution to the development of indigenous gas resources in Morocco in the event that future exploration drilling proves successful.

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