British firm set to invoke fury of Argentina as it strikes black gold in the Falklands

A British oil company is set to invoke the wrath of Argentina with the discovery of oil in the Falklands.

Rockhopper Exploration today announced that it has made an oil discovery in the North Falkland Basin - the first oil find of an exploration programme in the Falkland Islands that has already pushed relations between London and Buenos Aires to breaking point.

Oil exploration in the islands off the coast of South America has sparked angry protests from Argentina, which claims the British territory

Rockhopper Exploration said it has made an oil discovery in the North Falkland Basin, three months after hostilities between Argentina and the UK worsened with the arrival of the Ocean Guardian oil rig (pictured) off the islands

Shares in Rockhopper soared 138 per cent on the news. Shares in Desire Petroleum, another North Falklands-focused explorer, gained 85 per cent in the hope that it, too, will strike black gold.

Oriel Securities analyst Richard Rose said the oil find was very positive for Rockhopper and the share price reaction was not overdone, but cautioned that more information was needed on the quality of the oil reservoirs.
　
He said: 'If it does prove to be good quality reservoir, we're looking at maybe a discovery of a couple of hundred million barrels. It's very significant.'

Rockhopper said today that initial data collected from the Sea Lion prospect indicated that well 14/10-2 had found oil at intervals across 53 metres, which was 25 metres at its thickest point.

The company said it would carry out an additional assessment of the well before making a decision on whether to plug and abandon it or suspend it for future testing. It added it would also consider whether to drill a further appraisal well on the prospect.

British firm Rockhopper has found oil in the North Falkland Basin

Desire Petroleum made a gas find in the North Falklands Basin in March but said it had abandoned the well as the gas present was in poor quality reservoirs. Hostilities between the UK and Argentina reached boiling point in February with the arrival of Desire Petroleum's Ocean Guardian oil rig off the islands.

Buenos Aires has threatened to take steps to prevent what it believes is 'illegal' drilling. In February, the Ministry of Defence was forced to bolster its presence in the area. U.S. Secretary of State Hillary Clinton has said that the Obama administration would be willing to mediate in the matter - a blow to the U.S.-UK 'special' relationship.

President Cristina Fernandez de Kirchner has vowed that Argentina will never give up its claim to the islands, which they call the Malvinas. Mr Rose said that while he expected more rhetoric from the Argentinian government following the discovery, he did not see this as a problem for Rockhopper.

'Ultimately if you do find a commercial discovery it will be able to be commercialised with or without the co-operation of the Argentinians,' he said. Britain and Argentina have long had a tense relationship which culminated in the invasion of the Falklands in 1982.

A UK task force was sent to seize back control in a short war that claimed the lives of 649 Argentine and 255 British service personnel. Experts claim there could be 60billion barrels of oil in the rocks deep beneath the ocean floor.