MercoPress. South Atlantic News Agency

Argentina confirms drilling in Malvinas basin for next December

Defence minister Nilda Garré: a policy to stop the “encroaching” British oil companies

The Argentine press confirmed that following the contracting of a semi-submersible rig from the Swedish company Stensa, a consortium of Argentine based oil companies will begin exploratory drilling in the Malvinas basin next December.

The consortium which includes YPF-Repsol, Pan American Energy and Petrobras will be drilling half way between the Falkland Islands and Tierra del Fuego, in what is considered the most austral hydrocarbons offshore exploratory operation in Argentine history.

The initiative is seen as a strong reply from Argentina to the exploratory round in Falklands’ waters which the government of President Cristina Kirchner has condemned and rejected as “illegal” since these are “disputed waters”, according to the Argentine argument.

At least five London quoted companies have drilled or have announced plans to drill in Falklands’ waters taking advantage of the “Ocean Guardian” rig.

In Buenos Aires Defence ministry strategy considers the southwest Atlantic as “the soft belly of Argentina” and the policy has been to sponsor oil related activities in the area to contain the “encroaching” British companies, according to Argentina’s Cronista Comercial, a financial newspaper close to the government.

“A positive result in the area would give a boost to the industry, and investments, and also most importantly signal defence of our sovereignty”, said an Argentine Defence ministry source.

The consortium involved in the coming drilling round is estimated to pour into the operation 140 million US dollars. A 3D survey of the area to be explored was recently finished and analyzed.

Apparently the project was almost cancelled at the end of last year, but YPF was finally able to contract a semi-submersible rig which has the necessary fittings to stand weather conditions in the South Atlantic. Built to stand ten metre waves the rig is permanently fixed to its position by a GPS system and four independent turbines. The vessel will be operating in waters 1.500 metres deep and drilling is expected to exceed 3.000 metres.

Spain’s Repsol-YPF has sold some of its YPF assets back to Argentine interests, particularly the Eskenazi family which is very close to the Kirchner couple and had promised to go ahead with the Malvinas basin project.