Oil Discovered
A group of British exploration companies have discovered oil and gas in an offshore area north of the Falkland Islands, which could raise tensions with Argentina over their disputed ownership.
Falkland Oil and Gas, which shares the exploration area with Rockhopper and Premier Oil, said the 'Zebedee' exploration well was "better than expected".
The London-listed oil explorers found an oil reservoir 25 metres thick and a gas deposit 17.5m thick sandwiched between sands. The well was drilled on a licence area that is 40pc owned by Falkland Oil and Gas, 36pc Premier Oil, and 24pc Rockhopper Exploration.
Samuel Moody, chief executive at Rockhopper, said: "This is a fantastic start to the 2015 Falklands drilling campaign and provides early proof of the significant remaining potential of the North Falkland Basin."
The oil was found in the first of four wells due to be drilled during an eight month exploration campaign as the Eirik Raude floating drilling rig works through prospective sites to the South and East of the Falkland Islands.
The Eirik Raude exploration rig
"The new discoveries add to our already significant resources we have discovered in the basin and we now look forward to drilling the higher risk Isobel prospect before the rig moves to drill in the South Falkland Basin," added Mr Moody.
Jean-Pierre Dmirdjian, from broker Liberum, said: "We think today's discovery will raise the interest of the market for the 3 other wells to be drilled in 2015. This exploration programme could also lead to fuller recognition of the value of the existing Sea Lion asset."
Shares in Premier Oil jumped 3pc higher in morning trading while Rockhopper shares were up 1pc, and Falkland Oil and Gas shares fell 8.4pc.
War Threat
WHEN the UK struck oil in the Falklands a week ago, it was a discovery that was always likely to escalate already heightened tensions with Argentina over the ownership of the islands. After nine months of exploratory drilling, a group of British companies found oil and gas in a remote field north of the territory.
The bonanza, which could be worth billions of pounds, added fears of renewed conflict over the British overseas territory, just days after Defence Secretary Michael Fallon warned of “a very live threat” from Argentina.
The discovery, at the Zebedee exploratory well, comes amid worsening relations between London and Buenos Aires, 33 years after Argentina invaded the islands. The invasion led to a war that cost 260 British and 650 Argentinian lives before it was won by the UK. But Argentina still claims territorial rights to the islands.
Lord West, a former first Sea Lord, said the Zebedee find would lead to further claims by the Argentinians. He added, “The rhetoric and sabre-rattling from Argentina will grow. The Argentinians have always worried we will find oil and, given their economic state, they will think that they should have it.
“We will have to be careful. The only way to stop them is to ensure we have sufficient military there.” Two weeks ago, Britain pledged to invest £180million over the next ten years to defend the islands, with an upgrade of a surface-to-air missile system and the deployment of two Chinook helicopters. The commitment came after it was revealed that Russia could be helping to arm Argentina.
The Zebedee discovery follows another find nearby in 2012 through a project called Sea Lion. But the price of oil has halved since June, forcing many explorers to cut back on spending. Despite this, experts predict that future finds could be even more significant.
Apart from the prospect of military action, Argentina has also raised the diplomatic stakes by threatening to prosecute the oil companies drilling near the islands. Daniel Filmus, Argentina’s Minister for the Malvinas (as the Argentinians insist on calling the Falklands), said the exploration efforts in the area carry a huge environment risk.
He added that his country’s foreign and planning ministries would undertake joint work in the coming days to try to block further exploration. He said, “We want the owners of the companies to be tried according to Argentina’s laws and international statutes”, adding that the process “could end with an Argentinian judge issuing an arrest warrant against those who operate illegally in Argentinian waters.”
In a recent referendum, the Falklanders voted overwhelmingly to remain British but Argentina still claims it owns the islands, which are about 200 miles off its coast. The country’s president Christina Fernandez de Kirchner promised to regain the islands one day.
She said, “International law and dialogue, not militarisation, are the paths to a reunion and sovereignty. We will see the island form part of our territory again. It’s not just wishful thinking.”
Meanwhile, in what appears to be an incredible piece of bungling, British civil servants are said to have handed Argentina an “invasion handbook” for the Falklands after forgetting to encrypt a secret document. The document details every technical aspect of the RAF’s main base on the islands.
Details revealed in the document include the exact make-up of runways and thickness of concrete, enabling attacking bombers to know precisely which weapons to use for maximum effect. They also include how the runways are used at any given time, making it easy for an air strike to cause maximum disruption.
The document also contains GPS coordinates of every facility, maps illustrating the hardtop covers of RAF’s Typhoon fighters and advice as to the best runway approach in different conditions. The Ministry of Defence has now removed the data from its website.
But going back to the Zebedee discovery, I can tell you that it is expected to yield 100 million barrels of oil plus enormous quantities of gas. And as oil and gas expert Malcolm Graham-Wood puts it, “This is good for Britain, good for British oil companies, good for taxes and good for the industry.” No wonder Argentina is sabre-rattling.
The discovery, at the Zebedee exploratory well, comes amid worsening relations between London and Buenos Aires, 33 years after Argentina invaded the islands. The invasion led to a war that cost 260 British and 650 Argentinian lives before it was won by the UK. But Argentina still claims territorial rights to the islands.
Lord West, a former first Sea Lord, said the Zebedee find would lead to further claims by the Argentinians. He added, “The rhetoric and sabre-rattling from Argentina will grow. The Argentinians have always worried we will find oil and, given their economic state, they will think that they should have it.
“We will have to be careful. The only way to stop them is to ensure we have sufficient military there.” Two weeks ago, Britain pledged to invest £180million over the next ten years to defend the islands, with an upgrade of a surface-to-air missile system and the deployment of two Chinook helicopters. The commitment came after it was revealed that Russia could be helping to arm Argentina.
The Zebedee discovery follows another find nearby in 2012 through a project called Sea Lion. But the price of oil has halved since June, forcing many explorers to cut back on spending. Despite this, experts predict that future finds could be even more significant.
Apart from the prospect of military action, Argentina has also raised the diplomatic stakes by threatening to prosecute the oil companies drilling near the islands. Daniel Filmus, Argentina’s Minister for the Malvinas (as the Argentinians insist on calling the Falklands), said the exploration efforts in the area carry a huge environment risk.
He added that his country’s foreign and planning ministries would undertake joint work in the coming days to try to block further exploration. He said, “We want the owners of the companies to be tried according to Argentina’s laws and international statutes”, adding that the process “could end with an Argentinian judge issuing an arrest warrant against those who operate illegally in Argentinian waters.”
In a recent referendum, the Falklanders voted overwhelmingly to remain British but Argentina still claims it owns the islands, which are about 200 miles off its coast. The country’s president Christina Fernandez de Kirchner promised to regain the islands one day.
She said, “International law and dialogue, not militarisation, are the paths to a reunion and sovereignty. We will see the island form part of our territory again. It’s not just wishful thinking.”
Meanwhile, in what appears to be an incredible piece of bungling, British civil servants are said to have handed Argentina an “invasion handbook” for the Falklands after forgetting to encrypt a secret document. The document details every technical aspect of the RAF’s main base on the islands.
Details revealed in the document include the exact make-up of runways and thickness of concrete, enabling attacking bombers to know precisely which weapons to use for maximum effect. They also include how the runways are used at any given time, making it easy for an air strike to cause maximum disruption.
The document also contains GPS coordinates of every facility, maps illustrating the hardtop covers of RAF’s Typhoon fighters and advice as to the best runway approach in different conditions. The Ministry of Defence has now removed the data from its website.
But going back to the Zebedee discovery, I can tell you that it is expected to yield 100 million barrels of oil plus enormous quantities of gas. And as oil and gas expert Malcolm Graham-Wood puts it, “This is good for Britain, good for British oil companies, good for taxes and good for the industry.” No wonder Argentina is sabre-rattling.
Tim Collins: Argentina wouldn't dare invade the Falklands again
What struck me about the Falkland Islanders on the several occasions when I served there during my army career was their warmth and their disarming generosity.
That is not to say relations are always completely rosy between the islanders and the garrison that more than matches their numbers. The local joke goes “How do you make 4,000 people happy in the Falklands? Send 2,000 home”. The simple truth is that Falkland Isanders just want to be left alone.
But that is not likely to happen. Their jealous neighbour covets their tiny farms whilst using the islands as a convenient distraction from Argentina’s many domestic woes. With the news that the Russians are contemplating leasing 12 long range bombers to Argentina, it would appear that the military threat to the Falklands is still very real. So what could and should the UK be doing to reassure the islanders and deter the aggressor?
25,000 servicemen were sent to retake the Falklands in 1982 (Rex Features)
We first have to analyse what is happening and why. What are the real intentions of the Argentines? A glance at the state of Argentina provides the answer.
The discredited president, Cristina Fernandez de Kirchner, is the subject of a number of criminal allegations. She has been accused of money laundering and tax evasion.
Only last week she was cleared by an Argentine appeals court of covering up the alleged involvement of senior Iranian officials in a 1994 bomb attack against a Jewish centre in Buenos Aires.
The allegations were based on a 350-page dossier compiled by special prosecutor Alberto Nisman. Nisman died in unexplained circumstances in January: he apparently shot himself – in the back of the head. His family believe he was murdered. Following his mysterious death, hundreds of thousands of people marched in silence in the Buenos Aires rain to pay tribute to him.
A controversial figure, and the subject of some ridicule in Latin America, Kirchner followed her husband to power in a series of governments that have presided over the collapse of the Argentine economy. I recall when I visited Colombia and Peru in 2012, working with the governments there, that there was much speculation about Madam Kirchner’s operation for suspected thyroid cancer. She had shown no signs whatsoever of illness. One official noted: “When you get a biopsy done on both sides of your neck at once here, we call it a face-lift.”
It is to distract from the incompetence of her government, that Kirchner frequently wheels out the unjustifiable claim on the Falkland Islands. Despite a 2013 referendum in which the islanders voted to remain a British Overseas Territory – 1,513 to 3, with a turnout of more than 90 per cent, Kirchner dismisses them as squatters. Ironically, they have been there far longer than her own family have been “squatting”, to use her term, in southern America. Her grandparents were born in Spain and Germany.
So what would the addition of the Russian aircraft mean to the Argentine military? In my opionion, their impact would be negligible. The aircraft in question – Sukhoi SU 24s (NATO designation ‘FENCER’) – are old ladies with distinctly dated capabilities. They entered service with the Soviet Union in 1974 and were familiar to me when I served in Berlin in 1982. Those nations where they are still in service – for example Iran, Sudan and Kazakhstan – are not major air powers.
British Royal Navy frigate HMS Antelope explodes in the bay of San Carlos off East Falkland (Getty Images)
There are other problems for theArgentine Air Force. It still has not recovered from losing one third of its strength in the Falklands War. Its inventory includes a number of second hand A4 Sky Hawks – which proved easy pickings for the Royal Navy Harriers – and 60s era French Mirage fighters.
Furthermore, the force’s leadership is suspect. Kirchner sacked the top 17 air force generals in 2005 for involvement in drug trafficking.
Also, consider the fact that the Sukhoi deal is superb for Russia. In exchange for some ancient junk, the Russians would get shipments of beef and wheat – circumventing the EU sanctions imposed over its involvement in the Ukraine conflict whilst sticking two fingers up to the UK for our criticism of that involvement (Putin himself compared Russian stance on Ukraine with the UK stance on the Falklands).
However, the Fencers could have the range to get to the Falklands and back if unopposed – unlike the rest of the Argentine Air Force, with only the A4s being capable of air-to-air refuelling and with only two tanker aircraft being available.
So, if the deal went through and, more seriously, if Argentina’s attempts to procure 24 Saab Gripen fighters – modern Swedish aircraft – through an order place by Brazil are successful, then the Argentines would have – on paper at least – a credible threat to the tiny islands.
But only on two conditions; first they would need to be able to pay. Whilst Russians would swap for beef and wheat, the Brazilians would require hard cash. Argentina’s defence budget is 0.9 per cent of an economy that shrunk 2 per cent last year. Her defence spending outstrips only that of Suriname in the region – and Suriname is the smallest sovereign state in South America.
Secondly they would have to get past the Royal Navy, the Royal Air force and then survive the Army’s Star Streak missiles.
Getting past the Royal Navy would be a challenge. In the South Atlantic, the Royal Navy deploys at least one of the new Daring Class Type 45 destroyers. Doesn’t sound much; but with each one capable of tracking up to 1,000 targets from 400Km simultaneously and engaging up to 300 targets in layers from 120 km to 30 km (provided the targets are larger than a tennis ball) simultaneously, it is the equivalent of 5 Type 42 destroyers of the type used in the Falklands War.
British Task Force at San Carlos in 1982 (Rex Features)
In effect, if all the serviceable attack aircraft in all of Latin America – including Cuba – were attacking the Falklands, a Type 45 could cope comfortably.
Then there are the four Typhoons based in the Falklands. With a combat radius of 100 miles, they would far outperform anything that would come their way with the exception of the Gripens. The Gripens – slower, with a lower service ceiling, and less thrust than the Typhoons – would, in numbers at least, stand a chance against the Typhoons.
But then they have to avoid the Star Streak missiles. Built in Belfast, Star Streaks travel at more than Mach 3 – three times the speed of a SU 24. My money would be on the Star Streaks.
For the sake of argument, what if the Royal Navy was accounted for by the Argentine Navy? With 17 war ships, including four destroyers, and three submarines the Argentines have again – on paper – a threat to the Royal Navy and the Falklands. But, again, that is where the threat ends. On paper.
The bulk of the navy is confined to port because of a lack of spares and engine problems. The ships’ on-board ordnance is past its sell-by date. There isn’t even the money for petrol to run the engines. One of the corvettes, Spiro (P 43), is out of service having run aground. So is one of the elderly submarines, Santa Cruz. The Submarine fleet has achieved a grand total of 19 hours of submerged training since 2012 against a minimum requirement of 190 days.
Training is very poor. The list of disasters is endless. The Sarandi – one of the destroyers – managed to damage the Brazilian Frigate Rademaker by firing on her during joint naval exercises, injuring four Brazilian sailors and an Argentine observer when her fire control system went haywire.
The Destroyer Santisima Trinidad capsized and sank at anchor due to poor maintenance. And that is all before the Type 45s even turn on their defence systems against ships up to 40 years old and with the RN’s submarine fleet not even considered.
In a nutshell, I’m not sure what the fuss is about. I wouldn’t worry about the knackered old Fencers. They need to be maintained and we know that is one capability gap in the Argentine military.
Of course, we do need to keep up a strong defence – and that means we must maintain the two per cent spending required by NATO – if the peaceful farmers on the wind wept islands are to continue to live their bucolic ideal and Kirchner’s rhetoric is to remain just that.
But let the Russians have their little jibe. I hope they enjoy the beef
The discredited president, Cristina Fernandez de Kirchner, is the subject of a number of criminal allegations. She has been accused of money laundering and tax evasion.
Only last week she was cleared by an Argentine appeals court of covering up the alleged involvement of senior Iranian officials in a 1994 bomb attack against a Jewish centre in Buenos Aires.
The allegations were based on a 350-page dossier compiled by special prosecutor Alberto Nisman. Nisman died in unexplained circumstances in January: he apparently shot himself – in the back of the head. His family believe he was murdered. Following his mysterious death, hundreds of thousands of people marched in silence in the Buenos Aires rain to pay tribute to him.
A controversial figure, and the subject of some ridicule in Latin America, Kirchner followed her husband to power in a series of governments that have presided over the collapse of the Argentine economy. I recall when I visited Colombia and Peru in 2012, working with the governments there, that there was much speculation about Madam Kirchner’s operation for suspected thyroid cancer. She had shown no signs whatsoever of illness. One official noted: “When you get a biopsy done on both sides of your neck at once here, we call it a face-lift.”
It is to distract from the incompetence of her government, that Kirchner frequently wheels out the unjustifiable claim on the Falkland Islands. Despite a 2013 referendum in which the islanders voted to remain a British Overseas Territory – 1,513 to 3, with a turnout of more than 90 per cent, Kirchner dismisses them as squatters. Ironically, they have been there far longer than her own family have been “squatting”, to use her term, in southern America. Her grandparents were born in Spain and Germany.
So what would the addition of the Russian aircraft mean to the Argentine military? In my opionion, their impact would be negligible. The aircraft in question – Sukhoi SU 24s (NATO designation ‘FENCER’) – are old ladies with distinctly dated capabilities. They entered service with the Soviet Union in 1974 and were familiar to me when I served in Berlin in 1982. Those nations where they are still in service – for example Iran, Sudan and Kazakhstan – are not major air powers.
British Royal Navy frigate HMS Antelope explodes in the bay of San Carlos off East Falkland (Getty Images)
There are other problems for theArgentine Air Force. It still has not recovered from losing one third of its strength in the Falklands War. Its inventory includes a number of second hand A4 Sky Hawks – which proved easy pickings for the Royal Navy Harriers – and 60s era French Mirage fighters.
Furthermore, the force’s leadership is suspect. Kirchner sacked the top 17 air force generals in 2005 for involvement in drug trafficking.
Also, consider the fact that the Sukhoi deal is superb for Russia. In exchange for some ancient junk, the Russians would get shipments of beef and wheat – circumventing the EU sanctions imposed over its involvement in the Ukraine conflict whilst sticking two fingers up to the UK for our criticism of that involvement (Putin himself compared Russian stance on Ukraine with the UK stance on the Falklands).
However, the Fencers could have the range to get to the Falklands and back if unopposed – unlike the rest of the Argentine Air Force, with only the A4s being capable of air-to-air refuelling and with only two tanker aircraft being available.
So, if the deal went through and, more seriously, if Argentina’s attempts to procure 24 Saab Gripen fighters – modern Swedish aircraft – through an order place by Brazil are successful, then the Argentines would have – on paper at least – a credible threat to the tiny islands.
But only on two conditions; first they would need to be able to pay. Whilst Russians would swap for beef and wheat, the Brazilians would require hard cash. Argentina’s defence budget is 0.9 per cent of an economy that shrunk 2 per cent last year. Her defence spending outstrips only that of Suriname in the region – and Suriname is the smallest sovereign state in South America.
Secondly they would have to get past the Royal Navy, the Royal Air force and then survive the Army’s Star Streak missiles.
Getting past the Royal Navy would be a challenge. In the South Atlantic, the Royal Navy deploys at least one of the new Daring Class Type 45 destroyers. Doesn’t sound much; but with each one capable of tracking up to 1,000 targets from 400Km simultaneously and engaging up to 300 targets in layers from 120 km to 30 km (provided the targets are larger than a tennis ball) simultaneously, it is the equivalent of 5 Type 42 destroyers of the type used in the Falklands War.
British Task Force at San Carlos in 1982 (Rex Features)
In effect, if all the serviceable attack aircraft in all of Latin America – including Cuba – were attacking the Falklands, a Type 45 could cope comfortably.
Then there are the four Typhoons based in the Falklands. With a combat radius of 100 miles, they would far outperform anything that would come their way with the exception of the Gripens. The Gripens – slower, with a lower service ceiling, and less thrust than the Typhoons – would, in numbers at least, stand a chance against the Typhoons.
But then they have to avoid the Star Streak missiles. Built in Belfast, Star Streaks travel at more than Mach 3 – three times the speed of a SU 24. My money would be on the Star Streaks.
For the sake of argument, what if the Royal Navy was accounted for by the Argentine Navy? With 17 war ships, including four destroyers, and three submarines the Argentines have again – on paper – a threat to the Royal Navy and the Falklands. But, again, that is where the threat ends. On paper.
The bulk of the navy is confined to port because of a lack of spares and engine problems. The ships’ on-board ordnance is past its sell-by date. There isn’t even the money for petrol to run the engines. One of the corvettes, Spiro (P 43), is out of service having run aground. So is one of the elderly submarines, Santa Cruz. The Submarine fleet has achieved a grand total of 19 hours of submerged training since 2012 against a minimum requirement of 190 days.
Training is very poor. The list of disasters is endless. The Sarandi – one of the destroyers – managed to damage the Brazilian Frigate Rademaker by firing on her during joint naval exercises, injuring four Brazilian sailors and an Argentine observer when her fire control system went haywire.
The Destroyer Santisima Trinidad capsized and sank at anchor due to poor maintenance. And that is all before the Type 45s even turn on their defence systems against ships up to 40 years old and with the RN’s submarine fleet not even considered.
In a nutshell, I’m not sure what the fuss is about. I wouldn’t worry about the knackered old Fencers. They need to be maintained and we know that is one capability gap in the Argentine military.
Of course, we do need to keep up a strong defence – and that means we must maintain the two per cent spending required by NATO – if the peaceful farmers on the wind wept islands are to continue to live their bucolic ideal and Kirchner’s rhetoric is to remain just that.
But let the Russians have their little jibe. I hope they enjoy the beef
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