Monday, March 10, 2014

Oil Find Near Canary Islands

Anglo-Turkish oil exploration and production company Genel Energy have confirmed an oil find off the Moroccan coast about 100 km east of Fuerteventura in the Juby Maritime exploration area near Tarfaya. The company is exploring the area in a joint venture with Scottish Cairn Energy with a 25% stake held by the Moroccan state office for hydrocarbons and mines (ONHYM), and they are hoping to have discovered a well with a potential of producing 70 million barrels of oil. However, it is still unclear if this can be exploited as the oil is in depths of more than 3000 metres.
Oil rig passing La Gomera yesterday © GomeraToday
The Canarian government meanwhile wants to keep their promise of holding a referendum on the issue of oil exploration in its waters, despite opposition from the Spanish national government, and have stated today that the announced oil find only makes the referendum more urgent. They are also demanding the highest possible environmental guarantees from the Moroccan neighbours, and a withdrawal of exploration licences for Spanish oil giant Repsol who are planning to start drilling close to the area of the new find. A Canarian spokesman has also said that oil finds were announced several times before over the years without any oil ever having actually been produced. Just two kilometres from the current find Esso discovered a well in 1968, but it never produced any oil.
The issue is being hotly discussed in the Canaries with some hoping for jobs and new prosperity and saying that tourism and oil production could live side by side as was the case in Scotland, Norway and some Mediterranean countries - while many remain opposed, pointing to the grave dangers of oil drilling in such depths and stating that very little economic benefit may be felt in the Canary Islands.
The local government of La Gomera has voted to support a referendum on the issue recently. As if to illustrate the issue a huge oil rig was seen being towed past the coast of La Gomera yesterday.
UPDATE March 15th 2014:
Moroccan state agency ONHYM who hold a 25% share in the exploration have stated that oil has not yet been discovered and that the news of an oil find was due to a 'misunderstanding'. What was discovered was a layer of heavy oil or oil-rich sediment which would prove very difficult to extract however. 
UPDATE March 22nd 2014:
Cairn and Genel stated that they have capped and abandoned the oil well. They are saying that more time is needed to analyse and determine the quality of the discovered oil. Moroccan ONHYM already said that the oil reserves discovered in a band some 100 metres thick in Upper Jurassic deposits was not of good quality, Cairn and Genel will have to determine if or where to explore the area further.

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