£1bn Premier Oil Falkland deal

Published on 13/07/2012 00:00

PREMIER Oil has agreed a $1 billion (£645 million) deal intended to transform the remote Falkland Islands into an oil producer, a move that could inflame tensions with Argentina over sovereignty.

The UK firm said yesterday that it would partner Rockhopper, an explorer that made an oil discovery in the area in 2010, paying it an initial $231m in cash as well as providing some $770m to help build infrastructure.

Rockhopper has been looking for a partner to help it develop the Sea Lion field about 120m off the north of the Falkland Islands.

Premier dismissed concerns about investing in the politically sensitive project which has prompted Argentina to threaten legal action against oil firms active in the Falklands for what it sees as “illegal” drilling.