“Significant” gas find discovered near Falkland islands

By GARETH ROSE
Published on 24/04/2012 05:10

TENSIONS are expected to escalate between the UK and Argentina following the discovery of £2 billion worth of gas off the Falkland Islands.

Borders & Southern Petroleum, founded by Harry Dobson, from the Scottish Borders, has reported a “significant” find of gas condensate about 85 miles south of Port Stanley.

Samples from the Darwin basin will be taken back to Aberdeen for testing.

The company has one more well to drill, Stebbing, which is expected to start within ten days and take two months.

Whatever gas – or potentially oil – is found off the islands is likely to come into production after 2020. However, that timetable could be jeopardised by Argentina, which still claims sovereignty over the islands and has threatened to sue oil firms active in the area – as well as the logistical, financial and legal companies supporting them – calling the drilling “illegal”.

Argentina and the UK have traded insults over the Falklands in recent months, particularly around the 30th anniversary of the conflict.

A report by Mirabaud, Borders & Southern’s joint brokers, drafted following the latest find, spells out the possible problems.

“Today’s announcement comes just several weeks after the 30th anniversary of the start of the 1982 Falklands War,” it said. “It can be expected to inflame sentiment on both sides, given both countries’ need for the tax revenues that oil and gas development brings.”

Argentina has sparked fury in Europe by moving to seize Spanish-controlled energy firm YPF.

The Foreign Office has backed Borders & Southern and insisted its work was legitimate.

A spokeswoman said: “Today’s announcement is encouraging, and potentially very positive news for the Falkland islanders.

“We have always been clear that the Falkland Islands government is entitled to develop both fisheries and hydrocarbons industries within its own waters.”