Falkland surrounds to be explored by Argentina and Venezuela

Argentine and Venezuelen firms start to exploire Falkland surrounds
for oil and gas

Scottish newsFalkland surrounds to be explored by Argentina and Venezuela

by Aya Kawanishi

Argentina’s state-owned oil company YPF is in talks with its Venezuelan counterpart PDVSA to conduct oil and gas exploration around the British-ruled Falkland Islands, following a new law that banned ships “with a UK flag or other flag of convenience” sailing in the area for business purposes last week.

"We discussed the need for oil and gas exploration in the territory and offshore areas, adjacent to the Falklands, but we have to analyse the costs and time," PDVSA's chief executive Rafael Ramirez Carreno was quoted as saying in Argentine newspaper Pagina12. Mr Carreno said he had spoken with the president of YPF, Miguel Galuccio, in Buenos Aires on Wednesday.

Talks come after lawmakers in Buenos Aires passed a bill last week to prohibit ships “from mooring, anchoring or getting logistical help” in ports of the Falkland Islands, or Los Malvinas as known to the Argentine - the move which was seen as a prolonging attempt to assert the South American country’s claim over the islands. Argentina had already banned ships flying the Falklands flag from stopping at the country's ports.

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Political tensions between Argentina and the UK over natural resources in the Falklands have been worsening in the past year - the 30th anniversary of the Falklands war. In March, the Argentine Government threatened to sue British and American banks which allegedly encouraged exploring the area, just over a week ahead of the anniversary date.

In response, the British government tabled a White Paper in June officially pledging to defend the islands and declared there would be "no weakening" in the country's resolve.

Following the troublesome anniversary, YPF became state-owned when Argentina announced that it was taking control over from under Spain’s giant energy firm Repsol in April.  

Argentina’s latest move to team up with Venezuela to explore offshore of the islands could be seen as furthering a deteriorating “trade war” with the UK government.

Carreno, the president of Venezuela’s PDVSA, said the prospective investments in Argentina are the result of joint ventures in Venezuela between the two South American countries.

"We have a field in the (Venezuelan) Orinoco (Heavy-Oil) Belt, which produces 130,000 barrels a day," he said. "We will increase that production to 160,000 barrels and develop another field, which would produce another 200,000 barrels."

The Orinoco Belt is an area of 21,357 square miles (55,314 square kilometers) in the east of the country that has some 235,000 million barrels in proven reserves.

However, the PDVSA chief said Venezuela is "proceeding with caution" after a warning by Repsol to companies that partner with YPF after the expropriation of its shares.

"We reserve the right to take legal action against any investor in YPF or its assets that have been illegally expropriated from Repsol," company spokesman Kristian Rix told AFP in April, without elaborating.

"Repsol should think carefully before attempting to attack YPF," Carreno countered. "We are not threatening anybody. What we are doing is being consistent with our approach, and we are not going to trample over the Argentine company."

In an attempt to clarify its political status as a UK territory, the Legislative Assembly of the Falklands is planning to hold a referendum next year, the first time in its history, to ask inhabitants whether they want to remain part of Britain’s self-governing overseas territories.

Speaking on behalf of the Legislative Assembly, Gavin Short said: “We are holding this referendum not because we have any doubts about who we are and what future we want, but to show the world just how very certain we are about that.”

However, the near future of the islands is looking to become even more complex, with a US company entering the drilling programme in the area for the first time, as it was revealed today.

Noble Energy, a Texas-based exploration and production group, will invest between $180m and $230m over the next three years, taking a 35 percent stake in all but two of the licences owned by Falklands Oil & Gas for $25m.



Scottish News News Scotland

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commented 2012-08-06 23:37:18 +0100 · Flag
Interesting this one, given the chatter from British nationalists about Orkney and Shetland, the oil and staying with mother England should the referendum go yes. Now where should we start, Gibraltar is Spanish isn’t it? Las Malvinas…a no brainer that one….such fun!
published this page in News 2012-08-06 17:25:54 +0100