STANLEY, Falkland Islands, Aug. 9 (UPI) — The latest offshore oil discovery in the Falkland Islands waters is seen as a viable proposition, encouraging news for investors who have staked millions into developing the British overseas territories as a major energy hub.
Rockhopper Exploration, one of the prospecting firms with financial interests closely tied to British investors, said its latest drilling yielded oil that could lead to the area becoming an economically feasible oil province.
The drilling was conducted west of a well that didn’t produce as encouraging results as the latest operation.
The British-backed oil exploration and oil well development are a sore point for Argentina, which invaded the islands while under a military dictatorship in 1982. Britain pushed back Argentina’s advance after a 74-day conflict that caused about 1,000 deaths among civilians and troops. Argentina revived its sovereignty claim after the military gave way to an elected government.
Each new oil discovery seen as financially beneficial to the Falklands economy gives renewed momentum to Argentina’s claim for the islands.
Rockhopper Exploration said the latest results had given the company hope that the oil find is large enough to open up the South Atlantic region for more development.
The company said the latest appraisal well, designated as 14/10-6 in the exploration area’s Sea Lion feature, was drilled west of the 14/10-2 discovery well. The drilling reached a depth of 8,878 feet into the South Atlantic waters.
The company said its experts collected samples that proved that the Sea Lion feature had hydrocarbon deposits that were “commercially viable.”
The results will be included with other data to establish the full potential of the oil, the company said.
Rockhopper is one of several exploration companies drilling off the coast of the Falkland Islands. The drilling has involved leasing of rigs and exploration platforms at a cost of several million dollars and investors are keen to see positive results.
Two of Rockhopper’s earlier appraisal wells also produced encouraging results with commercially viable flows of oil during the stages of the exploratory operation.
Other exploration firms, including Desire Petroleum, haven ‘t been so successful with locating commercially feasible areas for development. However, Rockhopper’s efforts mean the Falkland Islands’ realizable reserves are slowly inching toward potentially profitable business.
Early exploration for oil in 2009 and 2010 raised hopes the islands’ waters could contain large reserves that could rival North Sea oil deposits.
While the Rockhopper awaits results to enter the next stage of development, the company has seen its equity values rise again after sharp falls. Industry experts said the company could be worth $683 million.