HOW THE FALKLAND ISLANDS GOVERNMENT IS PREPARING FOR FUTURE OFFSHORE OIL DEVELOPMENTS

by Andrew Gurr, Chief Executive, Falklands Islands Government

For many years now the presence of oil in the waters off our shores has been rumoured and three years ago the Falkland Islands Government (FIG) negotiated with seismic companies by tender to carry out two sets of seismic surveys, one to the North and one to the South of the Islands. The companies were pleased to carry out these surveys at their own expense on condition that they could subsequently sell the data to interested oil companies. Clearly the anticipation of the discovery of oil was beginning to become more than just a glint in the oil companies’ eyes.

Although our land area may be larger than people imagine, our population is smaller, with only around 2,200 inhabitants. Thus the locally based expertise in oil exploration was virtually nil and with that in mind the Government approached consultants in geological, environmental, and fiscal matters, in order to help guide us through the massive workload predicted in preparation for an oil licensing round. In September 1994 we formed the Oil Management Team by bringing together the major decision makers within the Islands - this included His Excellency the Governor, the Attorney General, the Financial Secretary, the Economic Adviser, the General Manager of the Falkland Islands Development Corporation, the Director of Fisheries, the Director of Education, and a representative of the elected Legislative Council.

The purpose of bringing together such a powerful team was to ensure that all management issues relating to oil exploration could be steered by one group. In order to achieve that the meetings have had to be held virtually every fortnight, with very tight minutes and a well understood action plan with a critical path. The crucial points on that path were agreed at an early date, with the Foreign and Commonwealth Office (FCO) and the Department of Trade and Industry in London, and we have been able to rely heavily upon their help and assistance whenever needed. Regular meetings have been held with the public in the Islands in order to explain to them progress that has been made towards oil exploration. Our work programme has also led us to set up two subsidiary bodies to the Oil Management Team.

The Oil Licensing Team in London is chaired by the Oil Licensing Administrator and includes our consultants based in the UK. That particular team is tasked with running the licensing round once it begins in October 1995. The other subsidiary group is referred to as FENTAG (Falklands Environmental Task Group) and this is chaired by the Director of Fisheries. It contains most of our leading local environmentalists and we are able to draw on their considerable expertise in setting out a programme for environmental baseline studies and subsequent moves ensuring the protection of our unique natural environment.

Throughout the whole process we have been learning both from our contact with consultants and from liaison with others who have been through similar experiences. Last March we took a team to Houston to the Association of American Petroleum Geologists’ conference and were able to have many useful discussions with both oil companies and other countries with licensing rounds. We have proceeded steadily according to our set programme and at every stage when we have reached a critical point we have achieved the targets that we have set ourselves.

In tandem with our administrative chores the FCO have been holding talks with their equivalent in Argentina in order to secure some kind of acquiescence from Argentina. Although neither Argentina nor the Falkland Islands are capable of reaching any agreement over sovereignty, there has been considerable liaison with regard to fishing in recent years, and it was always hoped that such co-operation would be reflected in the oil sector. Health and safety, protection of the environment and the possible use of Argentine oil bases are all issues of common interest. Whether these talks will be successful remains to be seen but should they fail there is every confidence in the Islands that we can proceed with our oil licensing round and see it through to a successful conclusion in 1996.