Published On: Wed, Jul 24th, 2013

Oil and Gas Curacao – Fantasies, Myths and Facts Explained by Dr. John V. Wright

RepsolAs a retired geologist with over 30 years experience in resource exploration both in hydrocarbons and minerals and resident on the island, I have taken some interest in the debate in Parliament on whether there is oil or gas present on Curacao or within its territorial waters.

Unfortunately, claims such as appeared during the last election that “Curacao sits on a mountain of oil” are only ‘Alice in Wonderland’ fantasy. Landmass Curacao sits on a 3km thick core of unprospective basaltic volcanic lava (locally known as ‘greenstone’) with a recently uplifted, thin cover of limestones having no hydrocarbon preservation potential.

The offshore territorial waters have received only little hydrocarbon exploration activity. There are no proven, probable, possible, inferred, undiscovered or any other type of reserves of oil or gas that have ever been identified, qualified or quantified. To my knowledge there is no history of any seeps or shows. Therefore statements by some parliamentarians to the effect there is an “over 90 percentage” chance of discovery or “most likely oil and gas in the Curacao territorial waters”, while adding to popular mythology, are without sound technical basis.

What we do know is there have been 3 seismic surveys, but no hydrocarbon wells have ever been drilled. The first seismic survey undertaken by Gulf Oil in 1975 was part of a regional survey of the southern Caribbean with widely spaced lines. In the second, in 1979, Western Geco shot a grid comprising 12 lines (423km) on the southern side of the island. Thirdly, several widely spaced regional lines are included in the 2004 BOLIVAR survey by the University of Texas.

Let us also dispel the myth that because seismic surveys have been shot in Curacao territorial waters automatically ‘proves’ hydrocarbons are present, because they do not. Shooting seismic surveys in hydrocarbon exploration is just one of the early steps in a long, systematic analytical process that may or may not lead to a discovery. Indeed most of the seismic data available for offshore Curacao is for regional assessment rather that prospect targeting.

The closest hydrocarbon wells to Curacao occur to the west and south of Aruba, where three deep wells (3-4km depth) were drilled in 1989/90. While these were all ‘dry holes’ they  provide important geological data which combined with the seismic data can be used to give a better understanding of the hydrocarbon exploration potential of the region. To this aim the University of Texas ‘Caribbean Basins Tectonics and Hydrocarbons’ collaborative project has been working for several years. It appears former Netherlands Antilles was a sponsor of this project but membership lapsed, presumably in 2010.

Publicly available data from this project have identified two main areas of interest in offshore Curacao waters but for gas rather than oil. These occur south towards the Venezuelan maritime border and west in the basin towards Aruba. While these areas possess some geological indicators of gas potential, they remain high risk (no proven hydrocarbons and not insignificant water depths). More detailed seismic survey will be required to improve geological models and to define actual prospects and drill targets. And as with the Aruban wells there still will be no guarantee of success.

However, none of this can proceed until a proper legal and transparent licensing framework to conduct hydrocarbon exploration is in place. While these are in place for Aruba and the Saba Bank, my understanding is that discussions on a National Draft Ordinance for the Leeward Islands (Curacao and Bonaire) were suspended in early 2010 prior to the dissolution of the Netherlands Antilles Parliament.

If the Curacao Government wishes to stimulate the commercial search for hydrocarbons in its territorial waters it is important such discussions are resumed. On the upside, the recent discovery (in 2009) of the ‘world giant’ La Perla gas field (>16 TCF proven reserves) in the Gulf of Venezuela, about 80km southwest of Aruba, means it could be very timely to attract oil companies to explore Curacao’s deeper territorial waters, as is now being actively undertaken by Repsol in Aruban waters.

Since writing this column a detailed explanation on the legal framework in which hydrocarbon exploration may proceed in Curacao territorial waters has been published in Antilliaans Dagblad (by Dirk Ormel of Van Eps Kunneman Van Doorne, 23 July), describing the formulation of a Production Sharing Contract (‘PSC’). For more information the reader is referred to this article (in Dutch).

Image: Drilling at Repsol’s La Perla giant gas project, Venezuela

Click Tag(s) for Related Articles: