UK-based explorer Desire Petroleum will report that oil discovered in test drilling off the Falkland Islands is not commercially viable, a newspaper cited industry sources as saying. London’s Sunday Times said Desire was expected to say that while it had found oil, there was not enough to justify developing the field, Reuters reported.
Drilling by the company of the first well in the region in over a decade ignited protests from Argentina, which claims the British territory. Buenos Aires said the exploration was a breach of its sovereignty, but Britain, which established rule in the islands in the 19th century and defeated an Argentine invasion of the islands in 1982, rejected the complaint.
Analysts had said the prospect could contain reserves of up to 400 million barrels, but the risk of hitting nothing was also seen as high. Three other explorers are planning to drill in the area: Falkland Oil and Gas, Rockhopper Exploration and Borders & Southern Petroleum.
A spokesman for Desire said yesterday that tests were ongoing, and the company would issue a statement later today clarifying the situation to shareholders.
