Falklands/Malvinas: New oil discovery reignite tensions between the U.K. and Argentina.
Memorial to the Falklands war in Argentina. The text reads: "The people of Ushuaia who, with their blood, irrigated the roots of our sovereignty over the Malvinas (Falklands)... We will return!!!".
Desire Petroleum Plc, the U.K. energy explorer, said a well off the Falkland Islands made the region’s second discovery this year, threatening to reignite a diplomatic dispute between the U.K. and Argentina.
In May, Rockhopper Exploration Plc made the first potentially commercial find around the South American islands 8,000 miles from the U.K. that Prime Minister Margaret Thatcher went to war to defend in 1982. Argentina still claims sovereignty and is protesting the drilling by forbidding vessels to load cargo at its ports, while the Falkland Islands has said no Argentine company will be given a license there.
“The more successes that happen, the greater the prize and the more that diplomatic tensions will rise,” said Peter Hitchens, an analyst at Panmure Gordon & Co. in London. Desire’s discovery “has proved up another play in the area and it could become a major hydrocarbon zone.”
Desire shares jumped 26 percent after the company said drilling at the Rachel North well encountered 57 meters of net pay in multiple zones at a depth of 3,052 meters (10,000 feet). Desire will now complete logging and sampling to analyze its quality and significance, it said.
The shares closed at 132.25 pence in London. Rockhopper, which owns a 7.5 percent interest in the well, jumped 8 percent and Argos Resources Ltd., another explorer in the islands, climbed 9 percent.
“This discovery, combined with Rockhopper’s Sea Lion discovery, confirms our belief that the eastern flank play fairway in the North Falkland Basin is highly prospective and that further oil fields will be discovered in this area,” Stephen Phipps, chairman of Malvern, England-based Desire, said in a statement.
Desire’s Rachel discovery may yield about…READ MORE HERE