By Alison Sider
HOUSTON--Noble Energy Inc. (NBL) executives said Thursday that
oil production in the Falkland Islands could begin in about six
years if an exploration well proves to be successful.
Susan Cunningham, senior vice president for exploration, said
during a conference call that drilling began on an exploration well
in the region late last month, the first that Noble has
participated in there under the farm-in agreement it entered with
Falkland Oil & Gas Ltd. (FOGL.LN) in August.
If that well results in an oil discovery, Ms. Cunningham said
the first production could come by 2018 or early 2019.
Under its agreement, Noble has a 35% operating interest in most
of Falkland Oil & Gas Ltd.'s licenses and agreed to spend $180
million to $230 million on exploration over the next three years.
Executives said on the conference call that the Falklands venture
has the potential to be a "game-changer" for Noble, and that
initial results from the well are expected by the end of the
year.
Oil exploration in the Falklands has been hindered by
sovereignty disputes. Though the archipelago is considered British
territory, Argentina hasn't given up its claim to the islands.
But Ms. Cunningham didn't mention geopolitical risk as a problem
for the company.
"We believe that the Falkland Islands is an area where
above-ground risk is very manageable," she said. "The regulatory
environment is sophisticated and stable, and the financial terms
are attractive."
Write to Alison Sider at alison.sider@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires