Oil exploration-Seychelles a pearl for U.S. exploration company |20 July 2005

The president and chief executive of Phoenix-based Liberty Petroleum Corporation, Mr Lane Franks, has the conviction that plenty of the world’s large oil and gas discoveries remain unfound.

“There are a lot of big plays and exploration opportunities out there,” he said in the June 2005 issue of The American Oil and Gas Reporter publication.   

According to Mr Franks some of the exploration opportunities have simply been overlooked in known hydrocarbon basins, while others, such as those in the Seychelles, are in remote areas that have not been properly evaluated.

“There are still a lot of multibillion barrel fields to be found,” he told the publication.
In February 2005 the Seychelles Government and the Seychelles Petroleum Company (Sepec) accepted an application from Petroquest International Incorporated of the U.S.A. for oil exploration in our waters.   

With world oil prices now above the high $60 a barrel and demand for petroleum products rising, there is renewed international interest in the search for hydrocarbons in Seychelles.

Liberty Petroleum which Mr Lane Franks heads is one of three companies that make up  Petroquest International.

Seychelles has designated 30,000 square kilometres of areas of the southern Seychelles Plateau, the Constant and Topaz banks, Farquhar and Coetivy for exploration by the American company.
The last major oil prospecting activity in Seychelles ended in 1996.

Generating interest in Seychelles’ potentials

Seychelles has a valuable stock of geological and geophysical data collected from earlier exploration activities. Sepec says it will continue to promote Seychelles’ oil potentials with the aim of generating exploration interests in our EEZ.

After Liberty Petroleum won the Seychelles properties, it started looking for partners, known as independents, to which it will sell an operating interest. Liberty Petroleum’s deliberate approach to get other companies to join in the search for oil here is spreading the news about the petroleum opportunities in Seychelles. This is good publicity for the islands.

Mr Franks said his company received visits from several major and large independent oil exploration companies after it showcased the Seychelles properties at the North American Prospect Expo last winter. He added that some of the large companies’ geologists believed passionately in the Seychelles’ potential. But the fact that the companies that prospected in Seychelles before did not remain, has stigmatized the area.

The mindset is that when Amoco moved in during the 1970s, it probably tested the area thoroughly.

Four wells were drilled, two exhibiting obvious issues in retrospect, showing that they were not on true closure.

“Another of the wells had an issue with seal, and the fourth did not get through to its target. That basically leaves the whole area completely untested in a proper fashion,” said Mr Franks.

“A closer look at those wells shows that it did not truly test the area’s potential. Texaco looked at it for a time, and Enterprise Oil came in during the 1980s, but never got through to its target,” added Mr Franks.

He said Liberty Petroleum had some impressive offers on the table from equally impressive companies. But, he added, Liberty Petroleum was taking a deliberate approach.

“We have offers from independents with proven track records,” he revealed.

“We are simply being careful about whom we hand over our pearl.”
While marketing the Seychelles’ geological and geophysical potentials, Mr Franks suggested that the islands’ other characteristics were equally encouraging.

He cited firstly white sandy beaches and balmy climate that make tourism the country’s chief industry.

“Most of the time, when the industry discovers big oil fields, they are found in the jungles, cold icy waters, or remote deserts,” he mused.

“It is counter to the pattern of industry experience to find prolific, shallow-water oil fields off an island paradise that is pro-business and pro-America.” 

Attractive qualities

Seychelles’ other attractive qualities, as cited by Mr Franks, include environment friendliness, the English-speaking population and a political, regulatory and economic structure that is appealing to the oil exploration industry.

The model agreement is structured like most commonwealth agreements.
“It starts with a 5 per cent base royalty supplemented by a three-tier profit tax similar to that of Australia,” said Mr Franks.

“Our model agreement is probably among the top five most favourable model agreements in the world to the benefit of the explorer. It is a very clean, very workable model agreement …” added Mr Franks.

The Seychelles have been described as petroleum paradise.
“We looked in various parts of the world, from Nigeria to Kazakhstan, before finally arriving at what we thought was the most exciting opportunity we had encountered anywhere,” Mr Franks said.

He told The American Oil and Gas Reporter publication that Liberty took some geologists to the beautiful vacation destination and they spent three days combing through the Seychelles offshore petroleum data.

Mr Franks said that their investigation revealed hydrocarbons leakage analysis suggesting that some of the most exciting aspects of the data were not simply seismic data.

“We saw that not only was there a working petroleum system with active tar ball seeps throughout the islands … but evidence from tests of ultraviolet fluorescents showed that isobutene and butane anomalies on the surface of the water were reliably coincident with the appearance of obvious gas chimneys occurring under those anomalies, indicating definite hydrocarbon migration,” Mr Franks said.

“What most excited us was how gigantic the structural features were. These are some of the largest fault block plays I have ever seen.”

Deciding that the Liberty should pounce on the opportunity, the company acquired a permit area of more than 5 million acres containing 20 mapped features.

Most of the plays contained in the Seychelles permit lie within a reasonable distance of the islands themselves.

“If there truly is a working petroleum system and seal, these features are so huge they could literally draw from hundreds of square miles to accumulate hydrocarbons in what could be world-class petroleum deposits,” the oil explorer said.

Liberty Petroleum Corporation was created out of earlier oil exploration ventures by Lane Franks and his brother Trent from the time they were teenagers. Trent founded Liberty Petroleum but vacated the position as chairman of the company after he was elected to the U.S. House of Representatives Second District in 2002. Lane succeeded him in that position.