MercoPress. South Atlantic News Agency

Falklands confirms second oil rig has reached the Islands; spudding planned for Monday

Leiv Eiriksson oil exploration rig has reached Falklands’ waters

Falklands oil industry sources confirmed that the semi-submersible Leiv Eiriksson oil exploration rig has reached Falklands’ waters and should be spudding its first well next Monday.

“Yes, she’s here and getting ready for Monday. She’s a real nice state of the art baby” said the Falklands sources.

Early in the day the Buenos Aires press quoting sources at Argentina’s Defence and Foreign Affairs ministries said that the oil rig flagged in Bahamas and contracted by Borders & Southern Plc and Falkland Oil and Gas Ltd (FOGL) had been detected approaching Malvinas waters.

The rig is expected to begin drilling next week two wells to the south and southeast of the Malvinas Islands.

According to the Buenos Aires media the rig was spotted by a maritime routine flight from an Orion P3-B belonging to the Argentina Air Naval service which took pictures of the vessel while sailing 547 miles east of Comodoro Rivadavia.

Apparently these maritime air patrols are routine as part of Argentina, together with South Africa, international responsibility to safeguard human lives and shipping in the vast South Atlantic.

The Buenos Aires press reported that the two exploratory wells to be drilled for Borders & Southern Plc are “very close to the Argentine 200 miles continental platform outer limit”.

Since the announcement November 2010 of the contracting of the Leif Eiriksson, “several Argentine offices among them the Malvinas and South Atlantic Desk at the Foreign Affairs ministry (Ambassador Sebastian Brugo Marcó) and the Office of Strategic Intelligence from the Ministry of Defence (Lourdes Puente de Lopez Llovet)”, began tracking the course of the rig from Greenland to the Falklands, with the help of shipping webs in the internet that show maritime traffic worldwide.

So far two other oil companies have been involved in the current round of exploratory drilling in Falklands’ waters which started in 2010: Desire Petroleum and Rockhopper Exploration Plc. Between them they have drilled over twenty wells with the ‘Ocean Guardian’ exploratory rig which left for Scotland in mid January.

Both companies found traces of oil and gas in several wells, but the real promising commercial discovery was done at the Sea Lion prospect where Rockhopper estimates there are 500 million barrels of good light crude.

However to undertake such a task, estimated in over two billion dollars, Rockhopper contracted Bank of America-Merrill Lynch to help find an investor that is interested in sharing such a promising potential.

All this with the background of the escalating conflict between London and Buenos Aires, which according to Argentine sources makes the whole operation even more risky since there is “an ongoing unsolved sovereignty dispute, with ample support for Argentina from neighbouring countries”.