MercoPress. South Atlantic News Agency

Falklands’ oil industry says first round of exploration was “hugely successful”

The second round of oil exploration in the Falklands has started with the arrival of the Leiv Eiriksson rig

Falklands’ oil industry sources said the round of oil exploration began in 2010 with the “Ocean Guardian” rig and just concluded, involving Rockhopper Exploration and Desire Petroleum, was “hugely successful” with several major oil and gas discoveries.

The comments follow on reports from London saying Energy Secretary Chris Huhne stated that the initial oil explorations in the waters surrounding the Falkland Islands were “disappointing,” although he indicated the course may change in the future.

During an energy debate in the House of Commons on Thursday, Tory MP for Romford Andrew Rosindell asked the minister “Have you made an assessment of the energy sources that may or may not be available in some of the British overseas territories? Particularly, I refer to the Falkland Islands.”

“It is indeed the case that there is exploration under way. Some of the initial exploration that was undertaken in territorial waters of the Falkland Islands was disappointing but that of course may change in the future,” the Secretary said.

“We don’t know exactly the source of the news or in what context, but to be clear Rockhopper with its Sea Lion field was hugely successful. But if Minister Huhne did say that then he needs to be corrected”, pointed out the Falklands oil industry sources.

For almost two years several Falklands’ government licensed companies have probed the area surrounding the Islands.

With the return this month to Scotland of the “Ocean Guardian” Desire Petroleum and Rockhopper have ended their first round, but a second rig “Leiv Eiriksson” has just arrived to drill several exploratory wells for Borders & Southern and Falkland Oil and Gas, mainly to the south and east of the Falklands.

Meanwhile Rockhopper has appointed Bank of America Merrill Lynch to lead the process of finding a partner for its 2 billion dollars oil project in the North Falkland basin Sea Lion field, one of the largest discoveries made in the region so far, with recoverable reserves estimated at nearly 500m barrels of oil.

Apparently several international companies are interested in teaming up with Rockhopper and the Sunday Times reported that Texas based Anadarko is in talks “that may lead to a takeover of the company”.

Rockhopper has said it plans to start commercial production in 2016 when it hopes to develop the Sea Lion field with a giant oil tanker moored over it. The ship will be fitted with a drilling rig and have the capacity to store up to three million barrels of oil, which would be offloaded to other tankers.

According to Houston press reports Anadarko made a provisional offer to invest nearly 1.6 billion dollars in Rockhopper and four Anadarko executives flew to Port Stanley recently to meet with the UK explorer, and one said that the provisional offer to invest in Rockhopper’s Sea Lion discovery and develop it is “on the table”.