Photographs by Chris Marais
Falcon Part 1: Aberdeen 6 February 2015, Friday afternoon
If you turn off the N9 for a few minutes to drive through the town of Aberdeen, there are a few things you’ll notice immediately.
First is the tall church steeple which leans very slightly sideways.
Second, the authentic Karoo architecture, complete with intricate ‘broekielace’ on stoeps, sash windows and shutters.
Third is that Aberdeen almost always has dramatic skies, yet rainfall doesn’t happen often. This is dry country, with an average rainfall of 250mm a year.
Everyone here lives on groundwater. If the town’s 8 boreholes failed for whatever reason, then the lives and livelihoods of around 14 000 mostly poor townspeople would be put at risk.
Heat and Anger in Aberdeen
In the late afternoon of Friday 6 February 2015, the parking bays outside Aberdeen’s Library Hall were full.
Inside, spinning ceiling fans barely kept the air moving and there was a simmering anger among the people who had come to listen to would-be shale gas frackers Falcon Oil & Gas.
Hovering near the stage was a tense looking man in a golf shirt. He was Falcon Oil & Gas CEO Philip O’Quigley, fresh out from Dublin, Ireland.
- Many farmers (evident by the shoes that have seen better days, 2-tone shirts and short shorts);
- The polite and friendly SRK consultants who had compiled Falcon’s Environmental Management Programme under discussion, all with name badges;
- Half a dozen people colour-coded in blue Democratic Alliance t-shirts;
- Derek Light, a Graaff-Reinet lawyer representing hundreds of landowners opposing shale gas exploitation;
- Dr Stefan Cramer, German hydrogeologist, also based in Graaff-Reinet;
- Dougie Stern, one of the Karoo farmers who has been to the US to see the effects of fracking on agriculture firsthand;
- A few media people from the SABC television, Graaff-Reinet Advertiser and the Weekend Post.
- As usual, there were no farmworkers, and very few people from the nearby township.
One of the first issues to be resolved was that the ceiling fans had to stay on, which meant the bad sound system was also necessary.
Shale House Rules
Then Elna de Beer of SRK, the consulting firm that had conducted the Environmental Management Programme for Falcon, began by firmly explaining the “House Rules”.
“Please be respectful and don’t interrupt. Question time is when we say so. No talk about fracking, since this isn’t about fracking, it is about seismic surveying.”
While Falcon and its partners would ultimately want to frack as part of exploring for shale gas in the Karoo Basin, the first three years would be focused on obtaining information on underground shale layers by planting a kilogram of dynamite in a 5-metre deep hole every 50 metres for 1000 km and measuring the underground sound waves.
Government had given shale gas applicants like Falcon, Bundu and Shell a chance to review and update their 2011 Environmental Management Programme (EMPr) because of “deep seated concerns expressed by interested and affected persons”.
So after four years of complete silence, Falcon had given interested and affect parties 30 days to comment on its exploration plans, with the aim of obtaining an exploration licence.
Meetings had already been held in Sutherland, Laingsburg, Merweville and Leeu Gamka.
The next day would be Jansenville, followed by Rietbron, Beaufort West and finishing off with a meeting in Cape Town’s Parow Civic Centre on 11 February.
First to speak was Philip O’Quigley, Falcon’s chief executive.
Background on Falcon Oil & Gas
O’Quigley became CEO of Falcon in May 2012, two years after Falcon snapped up their current southern Karoo Basin shale gas concession.
It is a company generally referred to as an ‘energy junior’. (Big multinationals like Shell are referred to as majors).
O’Quigley’s profile on the Falcon Oil & Gas website states that his previous job was as finance director for Irish oil and gas company Providence Resources. He is a qualified chartered accountant.
Falcon has three unconventional shale concessions – the Mako Trough in Hungary, the Beetaloo Basin in Australia and 30 000 square kilometres of southern Karoo Basin.
In each case, O’Quigley brought in outside partners for exploration. None of the concessions is yet in production phase.
The company’s business strategy, described on their website, says: “Falcon seeks to add value to its assets by entering into farm-out arrangements with major oil and gas companies that will fully or partially carry Falcon through seismic and drilling work programmes.”
Once he joined Falcon, O’Quigley set about seeking financing and partners.
- In December 2012, he announced a partnership with Chevron to “jointly seek unconventional exploration opportunities in the Karoo Basin”.
- In January 2013, he brought in a company called Naftna Industrija Srbije to drill three exploratory wells in Hungary.
- In August 2014, he brought in Origin Energy Resources Limited and Sasol Petroleum Australia Limited (a subsidiary of Sasol Ltd) as partners in the Beetaloo Basin, part of Australia’s Northern Territory.
Falcon is listed on the Toronto, London and Dublin stock exchanges. Its headquarters are in Dublin, with another office in Budapest.
In late 2014, the company was valued at 65 million pounds.
Falcon, O’Quigley and Chevron
In his soft Irish lilt, O’Quigley told the crowd of around 90 people that although the exploration licence was sought by Falcon, the exploratory seismic testing would be conducted by Chevron, “should Chevron choose to take up the option”.
O’Quigley said he might sell the exploration licence on.
His words did not sit well with most of the audience.
Riled by the ‘House Rules’ and the threat of explosives on his land, one of the farmers received a loud round of applause when he said:
“You didn’t ask if it was all right to come here. You made up the rules. Who will give you permission to come on my land? I can give you the answer now. No, you may not enter!
“My gates are locked. And don’t come with any helicopters, because my shotgun will be loaded.”
This Report is Meaningless
SRK project manager Danelle Fourie also came in for flack after presenting Falcon’s Environmental Management Programme (EMPr) to the crowd.
It turned out that while Falcon has drawn some red lines on a map indicating where it wants to do seismic testing, the exact route is far from finalised.
As a result, there can be no meaningful engagement, Derek Light pointed out.
“The regulations dictate you need to indicate where your activities will be performed. You can’t say you are exempt from that. It has got to be in the EMPr.
“You had four years to get this information. Where is it?
“You can’t wait until you have the exploration licence and are in a position of strength before you decide the terms.”
“It is difficult for me to be polite about this. This report is insulting. How can you ask us to comment when we don’t even know where you are going to be doing your seismic testing?
“This document is meaningless. Why persist? Why waste our time?
“You say your area is too large to complete the study. Why then did you choose such a large area? We didn’t choose it for you. You chose it.”
“You cannot produce an EMPr that informs us. You are required to incorporate site-specific information for meaningful discourse. This is even apparent to lay people.”
Locked Gates and Loaded Shotguns
Pushed to describe what factors would determine the final routing of the seismic testing, Philip O’Quigley said these were science (as in geology and geography), logistics (roads and servitudes) and “locked gates and loaded shotguns”.
It’s possible that Falcon and SRK thought they’d escape the worst of public scrutiny because they are doing seismic surveying, not drilling exploratory wells or fracking.
If so, they were wrong.
During and after the meeting, farmers exchanged anecdotes about how boreholes had suddenly stopped running. They talked about underground rivers and waterlines, and how delicate they are.
Rabie Gericke, the borehole and pump repair man in town, pointed at one of the red seismic survey lines just under Aberdeen on the rather confusing SRK map.
“That line? The west-east line you see on this map? That’s where Aberdeen’s water comes from. I know someone whose borehole stopped running after people using explosives to test for uranium.
“Anything happens there, this town is without water. And then what? Who is going to help us then?”
Landowner Pieter Jordaan stood up to say:
“You tell us that fracking may only happen in the future. Is that supposed to make us feel better?
“We are not idiots, and we are not happy with this. Where will the precise lines for the surveys be? If things go wrong, who will compensate and who will handle claims?”
“This is just the easy stuff, the paperwork. When you people actually come to frack, what will happen? You can’t even get the easy stuff right.
“I have a two-year-old boy. You have come here to take his birthright away. You walk away with the money. What about our land and our debts?”
Dynamite and Desktop Studies
It emerged that the studies mentioned in the EMP were ‘desktop studies’. In other words, existing literature had been used for information.
No one from Falcon or SRK or Chevron had actually visited the Karoo, taken samples of soil, or surveyed plants, ancient rock etchings or rare animals.
“Where did you get your information?” asked Pieter Jordaan. “Your groundwater studies could be 40 years old for all we know. You can’t say. Maybe they were studies done before centre pivots began being used for crops.”
Using these desktop studies, SRK had suggested mitigating measures to Falcon.
They seemed to assume the Karoo was flat and easy to traverse.
“Seismic data acquisition activities will move along rapidly (up to 10km a day) and direct impacts will therefore be of very short duration,” SRK wrote in the EMP executive summary.
If they are right, this means they will be exploding up to 200kg of dynamite a day.
What damage does a kilogram of dynamite cause? Danelle Fourie of SRK recommended googling YouTube videos of dynamite explosions.
Time and time again, locals raised the issue of fracking, despite SRK’s attempts to keep talk focused on seismic surveying.
“You can’t talk about this exploration and not talk about fracking,” protested one man. “The one leads to the other.”
Billions, Yet Cheap Equipment
O’Quigley countered: “We know there is a fear that once we start we will never stop. But that is not the case. There are huge hurdles for a long period of time, and our chances of success at this stage are only 10 to 20%.
“This phase of seismic surveying will cost a billion rand in the end. What we learn may not be enough or might be inconclusive. We will have to make a decision, us and our partners, to go forward to the next phase.
“If we go to the second phases, we will drill four to six wells and frack them – if the fracking regulations have been promulgated. That will cost another few billion over about five years.
“In about seven to 10 years time, we get to the FID, the Final Investment Decision. Only then do we make a commitment on exploitation. There are very many unknown factors and hurdles before then.”
Derek Light challenged Falcon’s financial and operational capacity.
O’Quigley insisted it was his choice to have a business model that brought in bigger partners.
Towards the end, Rabie Gericke the pump repair man summed it all up.
“You talk come here talking about billions. But then you use a cheap China sound system? We can’t even hear you!”