First Falklands oil find set to enrage Argentina

A BRITISH company has struck oil in waters near the Falkland Islands in a move that will spark fury in Argentina.

Rockhopper Exploration yesterday revealed that it had made the discovery in the North Falklands Basin, the first oil find since a series of explorations was launched earlier this year.

The drilling was criticised as illegal by the government of Argentina, which claims the British territory.

But UK Defence Minister Bill Rammell said the government had a "legitimate right" to build an oil industry in its waters, where experts believe there are 60 billion barrels of oil.

Shares in Rockhopper soared 138 per cent on the news.

Rockhopper managing director Sam Moody said: "We are extremely excited. Current indications are that we have made the first oil discovery in the North Falkland basin."

Falklands expert Gavin Farquhar, a partner in the energy and infrastructure team at legal firm McGrigors, said:

"It is expected up to eight wells will be drilled. After locating oil in one well it would be surprising not to find it in some of the other prospects in the area."

Hostilities between the UK and Argentina flared in February with the arrival of Desire Petroleum's Ocean Guardian oil rig off the islands, towed from Nigg in north-east Scotland.

Desire found gas in the North Falklands Basin in March but abandoned the well as the gas was in poor quality reservoirs.

Argentine president Cristina Fernandez de Kirchner has threatened to take steps to prevent drilling and, in February, the UK Ministry of Defence bolstered its presence in the area.