Borders and Southern Petroleum announce test results and remote islands will start producing their first oil in 2017
British oil explorer Borders and Southern Petroleum said on Monday the development of its gas condensate discovery in the Falkland Islands was commercially viable.
Borders made its Darwin discovery in April off the remote islands and has been carrying out tests since.
Argentina, defeated by Britain in a military conflict over the islands’ sovereignty in 1982, has attempted to make life difficult for British oil explorers, but its hostility has not deterred companies and the islands are due to start producing their first oil in 2017.
Any development by Borders would represent the islands’ second hydrocarbon project.
Initial studies showed that developing the discovery of the condensate, a liquid form of gas that trades at a premium to natural gas, was both technically and commercially feasible, the company said, boosting its shares by 12.5% to 27.37p in early trading.
More drilling needs to be done before it will be able to proceed with any project, Borders said, adding that development will cost between $1.6bn and $3.8bn.
Borders estimates the size of its discovery at 190 million barrels. The company said it was seeking a partner prior to the next drilling period and opened a data room for interested parties.