By Jeremy Cresswell
Business Editor Aberdeen Press & Journal
It is of course easy to be cynical aobout the time taken to achieve a workable compromise on the resources beundary between the UK and Faroe.
After all, if a relatively simpel issue concerning drawing the line between peacable North Atlantic neighbours can take this long, what hope is there for reaching dials where the politics are far more complex and where open conflict may exist.
I am, of course referring to the Yugoslavia mess and, nearer to home, Northern Ireland.
On the other hand, what was an urgent matter for the Faroese, was clearly not so for the UK with its much larger and more diverse economy and wider international interests.
Thorshavn had to wait and wait?and wait?and watch BP for one notch up a string of successes west of Shetland?Foinaven, Schiehallion, Suilven and perhaps even Conival.
It must have been horribly frustrating.
The good thing about the UF-Faroe boundary deal is that it appears reasonably equitable.
Oil folk are happy. Fisherfolk are appeased.
Much of the boundary is equidistant. There is only one sector where Britain appears to have gained the upper hand, but it is modest.
Step back five years or so, and Thorshavn was accusing the Brits of trying to grasp everything they could of what the Faroese regarded as their territory? bully boy tactisc, it was said on some quarters.
Assuming London had got its way, then the Danish possession?s fishermen would have been forced to put up with foreign oil installations disrupting operations on their fishing grounds.
The fact that only one dissenting voice was heard when the Faroese parliament debated the terms of the agreement means the deal must have been fair to the fishing industry.
It it was not, the fishery lobby would have put paid to an agreement without hesitation. It is curious that the one dissenting voice was former isles prime minister? Edmund Joensen.
One hears that he believed a better deal could have been brokered, had UK PM Tony Blair been presonally involved in talks with the Danes in Copenhagen over the fate of the Faroese.
Head of the Faroese negotiating team, Arni Olafssen, has to be congratulated for his quiet presistence. It seems not so long since he told the writer that he was dubious about achieving a workable settlement aftar years of getting nowhere.
Perhaps the real sea change in terms of the UK attitude to the Faroes boundary dispute came when the Tories were chucked out at the last General Election. Later Foreign Secretary Robin Cook?s much publicisesd letter to current Faroese PM, Anfinn Kallsberg.
More spadework followed and the quiet, unassuming Olafssen achieved a deal he can surely feel comfortable about.
To try and achieve an agreement totally based on the Geneva Convention formula and covering some 40.000 square km. could have taken several years more and involved a costly law suit against Britain in the International Court at the Hague.
During that time, Bog Oil could have lost interest in the UK portion of the Atlantic Frontier altogether. As it is, that interest is waning against a background of low oil prices, higt exploration and development costs, and the fact that the area has not been as prilific as the industry had hoped.
At last the door is open to the first Faroese oil and gas licensing round to be launched and for oil companies to test the hunch that reserves of crude and gas are trapped beneath the massive basalt shielt that masks much of the sedimetary rock beneath the archipelago and its undersea shelf.
An attractive fiscal dial is widely expected.
The companies are particularly keen to evaluate targets located in the deeps of the Faroe-Shetland Channel that may straddle the agreed median line? Greenpeace and other members of the environmental lobby permitting. (Greenpeace has been given leave by the High Court in London to challenge the British Government on west of Shetland).
No-one should be in any doubt about the fact that the UK Atlantic Frontier has lost its gloss. It has fallen a long way behind West Africa and the reborn Gulf of Mexico and Smith Rea Energy Analysts highlight this fact in their latest assessment of deepwater prospects worldwide.
Wells are planned this year, but only a few and the hoped for Clair field development remains on ice, having been stopped a year ago.
Just now, Mobil is out there on the Frontier, working with the Jack Bates, a deepwater capability semisubmersible which the oil company summarily dumped a few months ago, alleging deficiences and threatening litigation.
The Bates is close to the new boundary and started the 214/4-1 well on April 26. Wood Mackenzie says of the quest: »The operator is believed to be targetting a sizeable gas structure to the north of the block, close to the limit of UK designated acreage«.
Mobil will doubtless play it cards close to the chest. But if a find is made, and it extends into Faroese »geo-space« then maybe news will seep out more quickly than might otherwise be the case?for obvious reasons!
