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Fakland Islands: Weekly Penguin News Update

For the next two years, these five faces will become as familiar to some Falklands teenagers as their own friends and family. Kathryn, Vicky, Jo, Pam and Ben are the new teachers on the block at FICS,

DESIRE SHARE PRICE SOARS ON BACK OF OIL NEWS.
Desire Petroleum shareholders who have stood by their investments for more than a decade were rewarded yesterday when the news that a rig had been sourced sent shares leaping almost 40 per cent to 89p.

The drilling unit Ocean Guardian is scheduled to arrive in the Falklands on February 1, Stephen Phipps of Desire Petroleum said this week.

The unit will mobilise at the end of November and, following a 65-day tow, will begin its first round of oil exploration in Falklands’ waters since 1998.

The company has exchanged a letter of intent with Diamond Offshore Drilling (UK) for the unit, which will be used to drill in the North Basin: “We are looking forward to coming down again and drilling,” said Mr Phipps.

Director of Mineral Resources Phyl Rendell said congratulations should be extended to Desire, as the company had been seeking the right rig for several years: “This is a significant step forward for oil exploration in the Falklands,” she said.

With more than 200 share-holders in the Falklands, and an increase in share price of 39.5 per cent at the close of trading yesterday, Desire’s announcement is good news for many in the Falklands.

Councillor Mike Summers said: “It’s certainly a boost to everyone involved in that area, both in the public and private sectors. It also brings the prospect of a significant amount of additional work next year for the private sector.”

Mr Phipps said although the majority of those working towards oil discovery would be based offshore on the rig, there would be support staff based onshore who would contribute to “money coming into the Falklands, through restaurants and hotels.”

Although he couldn’t comment on the number of jobs the drilling may create for local inhabitants, he said it was unlikely more than 15 people would be based on land as support staff.

Logistical issues surrounding the project will now have to be resolved, with a long list of things to talk about when next in the Falklands, Mr Phipps said.

“Things like accommodation, flights, office, space - everything starts now. We’ll be sorting it out in the next few months.”

The security of the rig will have to be further addressed by Desire, said Cllr Summers, adding that after the recent consultant visit to discuss security the foreign and Commonwealth Office appears to be content with the progress government has made to date.

Mr Phipps said this was a “significant step towards finding oil.”

However if they were to discover oil in February, it would not be extracted for four or five years, due to appraisal wells, production platforms, infrastructure needed and other issues that would have to be resolved.

Councillor Summers said: “If oil is produced, and that’s still a long way off, the government receives royalty and income from corporation tax. But I must stress that is still a long way off. We don’t yet know if there are commercial accumulations of oil.

“If oil is found in very large quantities it would significantly change the economic perspective in the Falklands.”

Rockhopper Exploration will potentially also utilise the rig, after details have been finalised.

Mr Phipps said: “We believe we will find oil in the Falklands. The company is about drilling in the Falklands, so now we have a rig we can drill again.”