Petroleum, Politics and Penguins

15 Sep

Tensions in the South Atlantic are likely to ratchet up a couple of notches following yesterday’s announcement by Rockhopper Exploration, that they plan to spend $2bn (£1.3m) to develop an off shore oil field near the Falkland Islands.

Rockhopper estimates that its resource contains some 350 million barrels of oil which, while hardly initiating an offer to join OPEC, makes the discovery commercial and capable of producing 120,000 barrels a day by 2018. A spokesman for the Company told the press yesterday, that they had found a high quality reservoir package and oil column but made no mention of how the development was to be funded.

In an election year, Cristina Fernandez de Kirchner, Argentina’s incumbent President is likely to make much of this announcement for internal consumption and to bolster her support. Argentina’s claim to the Islands was pushed into a more prominent political position in 2006 by Kirchner’s late husband, Nestor, who preceded her as President. Raising the dispute’s international profile has played a major role in Argentina’s foreign policy ever since.

The British position remains that the future of the Islands lies with the Islanders and it they wish to remain British then that is an end to the matter. Britain has never expressed any doubt as to its sovereignty, and responsibility for the Falklands’ economy rests with the Falkland Islands’ Government which issued the oil exploration licenses.

 

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