Desire finds major oil prospect off Falklands

Stanley in the Falkland Islands

Business digest: Second commercially viable prospect of the year boosts oil explorer’s shares

LAST UPDATED AT 12:54 ON Thu 2 Dec 2010

Desire Petroleum has announced a significant oil find in the waters around the Falkland Islands. At an estimated 50m barrels of recoverable oil, it is the second prospect that may be commercially viable found in the area this year.

In May, Rockhopper Exploration struck oil in the North Falkland Basin - to the north of the islands. Today's find boosted the share prices of both Desire and Rockhopper.

Stephen Phipps, chairman of Desire, said: "This discovery, combined with Rockhopper's Sea Lion discovery, confirms our belief that the eastern flank play fairway in the North Falkland Basin is highly prospective and that further oil fields will be discovered in this area."

The new find brought a warning that the diplomatic dispute between Argentina and Britain for ownership of the islands, which may sit above four billion barrels of oil, will flare again. Analyst Peter Hitchens said: "The more successes that happen, the greater the prize and the more that diplomatic tensions will rise."

Read a full report at Bloomberg News. · 

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