Faroe Islands: Success Near

Jane Whaley

Published Date: August 3, 2010

For years the Faroe Islands have had to look on while their larger neighbours in north-west Europe have extracted untold riches in hydrocarbons from offshore acreage. Has their turn finally come?

The 1st Faroese Licensing Round was held in 2000 in a mood of great anticipation, but drilling results did not prove the optimism justified. Over 200 wells have been drilled on the UK side of the median line, yet only a handful in Faroese waters, predominantly due to the negative presence of large volumes of Palaeogene basalt overlying the primary prospective levels.

Now, however, geologists from the remote islands, which lie in the North Atlantic about 300 km north-west of Scotland, are saying that recent investigations suggest that success may be just around the corner. “The Faroese Continental Shelf could be the next big thing,” suggests Heri Ziska, Chief Geoscientist with the Faroese Licensing Authority. “In recent years additional wells, combined with advances in seismic technology, have started to reveal the secrets hidden in the deep waters around the islands. There are always challenges in frontier areas and the Faroes is no exception, particularly with sub-basalt imaging and stratigraphic plays in the forefront. However, we have learnt a lot over recent years, and the outcome is looking much more positive.”

Six kilometres of basalt

The Faroe Islands are part of the Atlantic margin of North West Europe, the basic tectonic framework of which was formed during the Palaeozoic Caledonian orogeny, as several land masses came together to form the supercontinent of Pangaea, establishing the underlying north-east to south-west trend which is still prevalent today. Later movement, commencing in the Late Palaeozoic as Greenland separated from Europe, resulted in a further major fault system, oriented north-west to south-east.

The oldest post-Caledonian sediments are Devonian redbeds, deposited in an intermontane basin environment, and overlain by Permo-Triassic fluvial and alluvial rocks. A major Middle Jurassic unconformity was followed by marine deposition, including the organic rich Kimmeridge Clay. The area suffered major rifting and subsidence during the Cretaceous, and deep rift basins, presumably Cretaceous or older, have been identified on seismic data from the Faroese Continental Shelf. Most palaeohighs were drowned by the late Cretaceous, preventing an influx of large volumes of coarse clastic sediments, and extensive shale deposition probably occurred during this time interval.

One of most significant geological events was extensive volcanism, which commenced at the end of the Paleocene, prior to the separation of the Faroe Plateau from Greenland. Most of the shelf was covered by substantial flood basalts, with a total stratigraphic thickness in excess of 6 km. They are subdivided into three separate formations, the lower two being separated by a thin sedimentary section.

Post-rift subsidence continued through the Cenozoic, with deep water conditions prevailing by the Eocene and continuing through to the present day.

Evidence of Petroleum Systems

Sub-seabed mapping of the Faroese Continental Shelf has revealed a number of promising structures below the basalt which could potentially hold billions of barrels of oil, and there is evidence of the elements required to make a working petroleum system. Despite several attempts, the sub-basalt horizons remain essentially unexplored.

The presence of oil and gas in wells and also as seeps proves hydrocarbon generation in the area. The main source rock is expected to be the Late Jurassic Kimmeridge Clay, which is widespread on the North Atlantic margin. There is also geochemical evidence of the presence of a Middle Jurassic lacustrine source rock, particularly on basin margins, and a Cretaceous source rock has been speculated.

Reservoirs from Cambrian to Eocene have been found on the UK side of the Faroe-Shetland Channel, but as yet only the Upper Paleocene has been investigated in the Faroes. The UK reservoirs are sourced by sediment from the Shetland Platform, but the distance to the Faroese Continental Shelf means that large quantities of potentially reservoir forming sediment are unlikely to have been derived from there. The East Greenland margin, which prior to continental break-up was close to the present day Faroese Platform, could be a major source of sediments, and there is palynological and mineral evidence to support this. In addition, the Faroese Platform itself may also be a sediment source, assuming that the land mass was emergent at various times in its history.

Seal is not expected to be a problem, with deep marine shales thought to be present beneath the basalt over much of the area, as evidenced by the only well to have successfully penetrated the volcanics. In the Judd Basin in the south-east, however, wells found larger volumes of sand than anticipated, and effective seal is a potential issue in this area.

Imaging under basalt

Seismic line through the Faroe Shetland Channel, across the East Faroe High Image: jardfeingiWhen the North Atlantic Margin broke up in the Early Tertiary, large volumes of molten rock were extruded onto what is now the Faroese Continental Shelf – possibly as much as one million cubic kilometres within a period of less than three million years. This has proved a hindrance to oil exploration, as it absorbs the higher frequencies, and the ray path is distorted by velocity variations between basalt and surrounding sediment, while the uneven surface of the volcanics results in energy scattering.
Over the years a number of methodologies have been applied to overcome this, including ocean bottom seismometers and cables, dragged arrays, vertical cables and multi-pass shooting, as discussed elsewhere in this edition. By combining the results of these various methods, a consistent picture of the sub-basalt structure and geology has now been built up.

View of Tindhólmur, in the western part of the Faroe Islands. The brown sedimentary units towards the base of the island belong to the coal-bearing Prestfjall Formation, sandwiched between two volcanic formations belonging to the Faroe Islands Basalt Group. Photo: Simon R. Passey – Faroese Earth and Energy Directorate

Short, hectic exploration history

Klaksvík, on Borðoy in the north-western Faroe Islands is the second largest town in the Faroes. Photo: Simon R. Passey – Faroese Earth and Energy DirectorateWells drilled and the areas under licence on the Faroese Continental Shelf. Image: jardfeingiInterest in the Faroes has been increasing since the 1980’s, after hydrocarbon discoveries were made west of the Shetlands, close to the border. After years of negotiations between the islands and the Danish government, which has sovereignty over them, exploration on the Faroese Continental Shelf started in 1994. By 2000 almost 50,000 km of 2D and 8,000 km2 of 3D seismic data were acquired, and a long running boundary dispute between the Islands and the UK resolved. “The 1st Round was held in an atmosphere of intense optimism,” says Heri, “and in terms of applications it was a great success. Seven licenses, all with geophysical commitments, were awarded to 12 companies, with eight commitment wells in the work programme.”

The first well in Faroese waters, Longan, in 935m water depth, was drilled in 2001 in the Judd Basin, 125km south-east of the Islands, considered the most promising area as it has little basalt. The well targeted Paleocene sandstones deposited in slope and basin floor environments, analogous to the Foinaven and Schiehallion fields just across the UK border. Unfortunately, it only showed traces of hydrocarbons, but encouraged further drilling. The next well, Svinoy, in December 2001, 40km to the east, was technically the first discovery well in Faroese waters, with good reservoir sands, and some gas, although not in commercial quantities. It was followed by Marjun, near the UK border, which found significant quantities of light oil and gas in the Lower Paleocene reservoir. Unfortunately, the 2002 follow-up well was dry, and the search for a Foinaven analogous trap in the Judd Basin faltered.

First sub-basalt target

A schematic interpretation of the Faroese Continental Shelf, with potential west of Shetland style plays identified. Image: jardfeingiThese poor results meant that the 2005 2nd Faroese Licensing Round was only moderately successful, although the UK Rosebank intra-basalt oil and gas discovery in 2004 aided interest, leading to the drilling of the first sub-basalt well in Faroese waters, in 2006. This well, 6104/21-1, was also the first away from the Judd Basin. It was drilled about 100km east of the southern tip of the Faroe Islands, on the East Faroe High. The target, Brugden, was a 4-way dip closure over a tilted, possibly Mesozoic, fault block with sub-basalt Palaeocene reservoir horizons, and with potential secondary targets within the basalt itself.

One kilometre of basalt had been expected, but the well actually penetrated 2.5 km of volcanics before finding the underlying Paleocene horizons. Unfortunately, drilling problems meant that the target horizon was never tested, but as Heri points out, a number of interesting things were learnt from this well. “Importantly, we discovered that drilling through basalt was much easier and quicker than we had expected. The well TD’d at 4,201m in Paleocene shale, probably a regional seal for underlying Paleocene reservoirs. Although no significant hydrocarbons were found, there were traces of gas and indications of a working petroleum system, and as the stratigraphic target was not reached, the prospect remains undrilled and promising.”

The most recent well, 6005/13-1A, drilled in April 2008 on the northern edge of the Judd Basin, again found large thicknesses of basalt, terminating before reaching the stratigraphic sub-basalt target. However, oil companies and the licensing authorities in the Faroes feel that they gained major insights and are not discouraged. As evidence of this, two further wells are planned in the near future in Faroese waters. The first of these, to be drilled this year near the edge of the basalt, is on the Anne-Marie prospect, which appears on seismic similar to Rosebank, 45km to the north-east.

The 3rd Faroese Licensing Round in July 2008 saw three licences awarded to various companies, including Faroe Petroleum, whose acreage covers the Wyville-Thomson Ridge, described as ‘the largest undrilled anticline in Europe’. The geologists in the company have identified the potentially billion barrel Rannva prospect, and hope to drill next year.

The next big thing?

So will the Faroe Islands be the next big thing, as Heri Ziska suggests? “Compare exploration on the Faroese Continental Shelf with that on the UKCS,” he says. “There has been exploration the UK side for over 30 years, and hundreds of wells have been drilled, while the Faroese area has only been open for exploration for less then ten years. On the UK side the whole stratigraphic column has been targeted, and all basins explored, while in the Faroese only the Paleocene has been effectively investigated, while five of the six wells drilled to date have been in a single sub-basin.”

“We understand so much more now than we did even five years ago,” Heri continues. “We know that there are a number of large structures present, which we can now visualise, even through great thicknesses of basalt – and we also know that we can drill quickly and efficiently through the basalt. These structures include potential traps in large-scale Cenozoic folds like the Wyville-Thompson ridge, and Mesozoic rotated fault blocks, which are located in relatively shallow waters at drillable depths. We have a much greater understanding of the evolution of the North Atlantic margin. There is evidence that at least one hydrocarbon system is active over large parts of the shelf, reservoir rocks are likely to be present, and there are many different plays to chase.”

The Faroese Continental Shelf remains a high risk area, but the potential rewards appear to outweigh the risks involved.

Sheep, fish and seabirds

The village of Gásadalur on the western island of Vágar has just 16 inhabitants and is overlooked by the 612m Heinanøva mountain. Photo: Simon R. Passey – Faroese Earth and Energy DirectorateThe Faroe Islands lie halfway between Iceland and Norway, 300 km north-west of Scotland. They cover an area 113 km long and 75 km wide and consist of 18 islands, almost all of which are inhabited, with a total population of around 50,000. Although lying only about 400 km south of the Arctic circle, the islands are warmed by the Gulf Stream, so the harbours never freeze and snowfalls are occasional and short-lived. There are very few trees, and only 6% of the land is cultivated, the rest being pastureland for approximately 70,000 sheep.
The first settlers on these remote islands were probably monks, arriving in the seventh century, swiftly followed by Vikings, who set up trading posts all around Northern Europe. In the 12th century the Faroes became part of the Norwegian empire, later taken over by Denmark. Since 1948 the Islands have been a self-gover¬ning region of Denmark, with their own parliament and flag.
The Faroese are renowned sailors and fishermen and fishing is the most important source of income for the islands, accounting for 97% of exports by volume and about 20% of GDP. Tourism is also important, as the remoteness, the fresh, clean air, the wildlife, particularly seabirds, and the unique culture attract 40,000 visitors annually, with an additional 35,000 arriving with cruise ships. In fact, a National Geographic Traveller Survey recently voted the Faroe Islands the best island destination in the world.