Energulf Resources Inc. ENGFF

About the environmental impact.

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The question was raised that, before we can start producing any oil that is found, we have to do an environmental impact study. So the question becomes, have other countries determined that offshore drilling is environmentally friendly? Drilling or digging for oil has occurred in one way or another for hundreds of years. The Chinese, for instance, invented a bamboo rig to obtain oil and gas for lighting and cooking. We are a little bit more sophisticated nowadays. In Australia, nearly 90 per cent of their petroleum is found offshore, and Australia has some of the strictist environmental codes in the world. Locating an oil and gas "trap" - as it is known - and extracting the oil and gas is difficult enough on land. But offshore, in deep and often stormy waters, it becomes an awesome undertaking. In the early days of offshore drilling, explorers simply fitted a derrick to a barge and towed it to their site. Today drill ships are used. These look like ordinary ships but have a derrick on top which drills through a hole in the hull. Drill ships are either anchored or positioned with computer-controlled propellers along the hull which continually correct the ships drift. They are often used to drill "wildcat" wells in deep waters. Potential traps are identified by analysing seismic survey data but whether they contain oil or gas won't be known until a drill bit penetrates the structure. However, 3D and 4D imaging increase the odds of oil/gas being found, and if previous drilling in the formations has uncovered oil, then the odds are even better that when thge drill penetrates the formation, oil will be found. Directing the drill bit to a precise location - perhaps several kilometres away - requires sophisticated computer technology. A navigation device installed above the drill bit feeds back information which enables the exact position of the well to be measured and monitored. A steerable motor within the drillpipe can be remotely controlled to adjust the direction of the drill. Environmental safeguards What is the impact of drilling on the marine environment? The Australian offshore petroleum industry has always contended that its activities are environmentally friendly. The industry's case has now been given increased strength with the findings of the Independent Scientific Review Committee (ISRC) inquiry commissioned by the Australian Petroleum Exploration Association. In Australia up to 100 offshore wells per year are drilled. About a quarter of these are development wells to produce oil or gas found by previous drilling. Before a well can be drilled, government approval must be obtained. Drilling must then conform to statutory conditions and further operations are covered by industry Codes of Practice. The Independent Scientific Review has found that environmental impacts from offshore exploration and production are negligible. The ISR examined the potential environmental effects of discharge of drilling fluids, drill cuttings and "produced formation water" (PFW). Companies in Australia safeguard the environment and minimise impacts in a number of ways. Drilling fluids used in Australia are almost exclusively water-based, not oil-based. During production, oil is separated from the water by mechanical devices before the produced formation water is returned to sea. Australia's regulations on how much petroleum hydrocarbon is contained in PFW are among the world's strictest. Sophisticated and reliable blowout prevention systems (BOP) are used in every production well to minimise the possibility of a blowout - where uncontrolled fluids flow from a well.