Desire Petroleum

<>Desire Petroleum plc (Desire) is a UK company listed on the Alternative Investment Market (AIM) dedicated to exploring for oil and gas in the North Falkland Basin.

Desire has recently completed a 6 well exploration programme. The Liz well encountered dry gas and gas condensate at 2 separate levels while other wells recorded shows.
Together with the Rockhopper Exploration Sea Lion oil discovery in the licence to the north, these wells have provided significant encouragement for the potential of the North Falkland Basin. The oil at Sea Lion is of particular interest as this has demonstrated that oil is trapped in potentially significant quantities in a fan sandstone on the east flank of the basin. It is believed that over 50% of this east flank play fairway is on Desire operated acreage.

Desire has now completed new 3D seismic acquisition which provides coverage over the east flank play, Ann, Pam and Helen prospects. The results from fast-track processing of priority areas are provided in the 2011 CPR. A farm-out to Rockhopper has been announced. The revised equities are shown on the licence map (subject to regulatory approval and completion of the farm-in well). Desire Petroleum

Rockhopper Exploration

British Geological Survey

Argos Resources



Latest Press Realeses from Desire

http://www.sartma.com/art_4586.html

Falklands : BHP Spin-Off Could be Good for Desire
Submitted by Falkland Islands News Network (Juanita Brock) 03.10.2007 (Current Article)
Now that BHP are a farm-in partner of FOGL the spin-off could benefit other exploration companies to find suitable rigs for exploration.


BHP SPIN-OFF COULD BE GOOD FOR DESIRE

By J. Brock (FINN)

On Monday 01 October 2007 Desire Petroleum held a shareholders meeting at the Falkland Islands Chamber of Commerce Function Room. About a dozen shareholders made the meeting on Peat Cutting Monday and heard some very encouraging news from Dr. Colin Phipps and Mr Ian Duncan about the prospects in their tranches in the North Falklands Basin. To say that the next 12 months are going to be exciting is putting it mildly. FINN has interviewed Dr. Phipps about the way forward for his company and the industry in the Falklands in general. He was asked first about rig availability.

CP: Today you would have had the announcement from Falkland Oil and Gas that they have done a farm-out deal with BHP. The deal states that BHP will drill 2 wells in the next three years. Now, BHP has two rigs which are now in the American Gulf Coast. It may be that they will bring one of them down to drill here in the South Atlantic. But they havent said when they will.

And, its not certain that the rigs that they have in the Gulf Coast are going to be suitable, anyway, for drilling in the South and East Falklands Basins. So, I think as far as the rig situation is concerned, we are all of us still going to be looking and the probability is that BHP will now join with us in that search. Two alternatives are that BHP bring a rig down that the rest of us use or they join with us in getting a rig.

The difficulty at the moment with rig availability is that all of the rigs are contracted for a long time. But its beginning to look as if some of the companies that have taken long-term contracts dont really have enough oil to fill up the length of contract so there is spare capacity. And also, and it is perhaps more important, a large number of new rigs are becoming available as they come off the shipyards. So, there are going to be a lot more rigs.

It may be a fairly slow process but I think that the additional rigs that are coming on to the market the prices will start to dip and rig availability will become better. So, right at the moment it is probably looking better for getting a rig than it has done for quite some time. And what BHP is doing is clearly going to be a catalyst in helping that to happen.


FINN: There have been a few speculative articles about Borders and Southern and working with the rest of the exploration companies. From what I can understand from them, their waters are too deep for even an enhanced rig. Is this still the case? Have rigs been advanced enough?


CP: They have a deep water rig that could drill there quite successfully. There are plenty of deep water rigs that can drill there. These are rigs that are either ships or dynamically positioned drilling rigs which means they dont need anchors. They stay on station because they have a multitude of thrusters working all the time to keep them on a single spot. These thrusters are very expensive pieces of machinery and the fuel costs are very high if the weather is particularly bad to keep them on station you use a lot more fuel for the thrusters. But there are certainly rigs available that will meet those requirements. You may check this out but we certainly have spoken with all the other companies about going forward and these are certainly one of the options.



FINN: Are dynamically positioned rigs and drill ships the same thing?


CP: A drill ship is often dynamically positioned in fact they always have done it but it is ship shaped. The advantage of that is it can go from one location to another as fast as a ship can so it cuts down the transit time. And cost per day is high.



A drilling rig dynamically positioned is not shaped like a ship. It can also move under its own steam but it cant move quite as fast as a ship shaped rig.


FINN: I am curious about the amount of oil you say you have. Is it just in one prospect the 2.3 billion barrels or is it in all of them?


Its in all of the prospects on the tranches C and D. There is additional prospectivity in Tranches I and L. that would add to that. Besides, these are prospective. They have yet to be discovered. And, of course, it may be that they are not there but we would certainly hope equally that it could be more.


FINN: Indications I get from the South American Press are that the larger companies are pulling out of Latin America and selling their assets. Do you think that you might be seeing them here in the Falklands?


CP: Well, its possible, I mean it would certainly take away some of the embarrassment of companies likes Shell and ESSO being involved in Argentina and therefore it might be easier to come to the Falklands. I am not sure to what extent the politics here have kept out some of the larger companies but I think it must have had influence. They have large investments in places like Argentina relatively large, anyway. It would, I think, have an affect on their view of the Falklands. If they moved out of Argentina and I think Shell has already pulled out their assets in Argentina and I understand ESSO is going to do the same. Not merely in Argentina but through Latin America Venezuela and Bolivia and Ecuador. They are all very nervous that they are going to see the old-fashioned type of dictatorships beginning to emerge again in South America with presidents giving themselves much more than one or two terms and others becoming extremely nationalistic. Nationalism in the left wing and the right wing there has equally been right and left wing nationalism expropriation the sort of thing you have been seeing in Venezuela and Bolivia. And, the companies are very reluctant to invest more. And if you are not going to invest more the appropriate thing is to disinvest.

It could help here but so far its early days.


FINN: How are you going to deal with the fact that Argentina might demand that a company working in their country should not work in the oil industry here?


BHP, for instance, which has just become a partner of FOGL have no interests in Argentina but have major interests in Chile one of the biggest mining companies in Chile, so they are not going to worry about Argentine politics and I suspect that others that come in will be in a similar position.


FINN: Your share prices, hovering between 28.00 and 32.00 could go higher. Are you satisfied with the price?


I am never satisfied with the share price but in the final analysis its the success that we achieve that will determine what the share price will become and there are a number of steps towards that. That will be reflected one way or another in the share price. Once we start drilling that will influence the price. If we are successful it will be great. The current price is reflecting the cash position of the company and some of its future potential. Shareholders and the market are really waiting to see if we get a rig and at that stage I think the market will become more active.


FINN would like to thank Dr. Phipps for taking the time to do this interview.

http://www.falkland-malvinas.com/vernoticia.do?id=11523&formato=HTML

Australias Billiton shrugs off Argentine legal actions threats
Resources giant BHP Billiton appears to have shrugged off the threat of legal sanctions by Argentina following the decision to acquire oil and gas exploration acreage off the disputed Falkland Islands according to reports in the Australian press
Argentina has condemned the deal and plans to write to BHP to say it faces bans in Argentina if it moves to explore under the newly acquired British exploration licenses.

Earlier this year Argentina scrapped a Falkland Islands oil exploration accord with Britain, blaming Britain for unilaterally calling for tenders on oil exploration in the area. Argentina is now insisting that the long dispute over sovereignty of the islands be resolved before any oil deals are done.

BHP ducked the controversy to focus on the prospects for finding oil.

"We are very excited about this opportunity and we think it has good potential. It isn't appropriate for BHP Billiton to discuss the topic of sovereignty" said a BHP spokeswoman.

BHP has no significant assets in Argentina, having sold its stake in the Alumbrera copper and gold mine in 2003.

A spokesman for the Australian Department of Foreign Affairs and Trade said any decision by BHP to explore off the Falkland Islands was a matter for BHP. "It would be a commercial decision and (BHP) would need to weigh up the likely responses of the principals involved," the spokesman said.

However he said Australia was encouraging Argentina and Britain to resolve the issue of sovereignty through bilateral talks, or through the United Nations if required.

BHP's decision to explore so far south is the latest sign that the global hunt for oil and gas reserves is becoming more desperate. BHP's exploration venture off the Falklands will not only see it braving potential Argentine sanctions, but also high seas, freezing conditions and even the odd iceberg.

By funding exploration costs over the next three years, including the drilling of at least two exploration wells, BHP will earn 40% of UK-based Falkland Oil & Gas Ltd's exploration licences off the Falklands. BHP also has an option to earn a stake of up to 65% in the prospects. Upfront, BHP has agreed to pay FOGL 10 million US dollars to cover historical costs. BHP will take over operational control of the licences from the start of next year.

The FOGL licences cover nearly 73,000 square kilometers to the east and south of the Falkland Islands. But BHP's drillers will have to battle difficult weather conditions to operate in water more than a kilometer deep. Drilling will also be expensive, given the remote location and lack of infrastructure.

Given the tiny size of the Falkland Islands, with only 2000 inhabitants, BHP is expected to have to rely on its production hubs in the Gulf of Mexico and Australia to provide operational support and expertise.

Falklands Says Exploration `Inevitable' Given Record Prices
By Tom Cahill
Oct. 4 (Bloomberg) -- BHP Billiton Ltd.'s decision to drill
at least two exploration wells in the Falkland Islands was
``inevitable'' as record oil prices reinvigorate interest in one
of the world's least explored oil provinces.
``With the price of oil where it is, it's inevitable that
the oil majors will look at the Falklands,'' Phyl Rendell, the
Falkland government's director of mineral resources, said in a
telephone interview today from Stanley, the islands' capital.
``We need some large companies to make it happen. It's just a
matter of time.''
Only six wells have been drilled in the remote South
Atlantic island, the subject of a 1982 war between the U.K. and
Argentina. Those wells, the only exploration in a region half
the size of Texas, were drilled in 1998, when oil prices on the
New York Mercantile Exchange sank as low as $10.35 a barrel,
compared with $79.66 today.
Rendell dismissed a report yesterday that Argentina will
``formally'' protest BHP's oil exploration permits, as reported
by the state information agency Telam. Argentina earlier this
year forbade companies that explore in the Falklands, which it
calls Islas Malvinas, from investing in Argentina.
``We're fairly used to it,'' said Rendell. ``Nothing has
changed as far as we're concerned. We're a British overseas
territory and nothing has changed overnight.''
BHP, the world's largest mining company, on Oct. 2 said it
agreed to acquire at least 40 percent of two Falkland licenses
with an option to increase to 65 percent. In return, it will
help finance a drilling program for Falkland Oil and Gas Ltd.
BHP said Argentina's concerns wouldn't affect its plans.

High Rates

``We will proceed as per our agreement with Falkland Oil &
Gas,'' Mark Lidiard, a London-based BHP spokesman, said today in
a telephone interview. ``We don't comment on issues of
sovereignty.''
The BHP licenses cover areas south of the islands, an area
that has yet to be drilled.
Exploration by Falkland Oil and Gas and other companies had
been stymied by high drill rig rates compounded by as much as
$30 million to transport a drill rig to the islands, a distance
of more than 8,000 miles (13,100 kilometers) from Aberdeen, the
U.K. center for oil exploration in the North Sea.
Royal Dutch Shell Plc, which led the 1998 drilling and has
since abandoned the region, defrayed costs by forming a sharing
agreement with other oil companies. That strategy may work
again.
``The previous model of sharing a rig worked for
everybody,'' said Rendell. ``Not everyone is ready to drill.
Those that are ready would take advantage.''
By coincidence, the Falkland Islands this week hosted its
first group meeting since 1998 between government and company
officials with prospects in the area, including Desire Petroleum
Plc , Borders & Southern Petroleum Plc and Rockhopper
Exploration Plc.
``We arranged this back in January but the meetings have
been influenced by the announcement,'' said Rendell. ``It's
still pretty early days, but it's much more focused.''

http://www.falklandnews.com/public/story.cfm?get=4694&source=3

(Falkland Islands)



OIL OPERATORS PUBLIC MEETING REPORT (04/10/2007)

http://www.sartma.com/art_4609.html

HYDROCARBONS WEEKEND RECORD: 05 TO 07 OCTOBER 2007

Compiled by J. Brock (FINN)


ASSESSMENT OF RISK KEY TO BHP AGREEMENT WITH FOGL

By J. Brock (FINN)


The Falklands are awash with oil optimism now that BHP Billiton has decided to farm-in with Falkland Oil and Gas (FOGL). One key factor in the decision to farm in with FOGL was the risk involved with exploratory drilling in FOGLs prospects in the South and East Falklands Basins. It is understood that British Geological Survey (BGS) assesses the risk in the North Falklands Basin as one in five and in the South and East Falkland Basins it is more like one in ten. With those odds it is a wonder why anyone would be interested in farming in so there must be something that lowered the risks. Part of the answer comes with the more detailed 3D seismic and, more importantly, the CSEM study that began in February this year.

Before he left the Falklands FINN asked Mr. Tim Bushell, CEO of Falkland Oil and Gas about FOGLs assessment of risk and why it is so much better than BGSs predictions.


FINN: In the public meeting you mentioned that there would be no drilling unless the risk is assessed and that risk is at least one in three. How is the risk assessed?


TB: One prospect in Desire tranches actually has a 1 in 2 risk. Oil Companies are fairly standard in the way they assess risk. There is an assessment of risk on every prospect in accordance with characteristics of prospects.

BGS have the view that a 1 in 5 risk exists in the North and a 1 in 10 risk in the South. No big Oil Companies would disagree that this is a frontier prospect however, all of the seismic work and CSEM helped to reduce the risk in the North as well as in the south and east. Risks in the north are lower than those in the south however FOGL believes risks in the south and east are lower than 1 in 10.

FINN: What are FOGLs specific risks?

TB: FOGL risks are lower than 1 in 10. After the risk assessment using CSEM and 3D Seismic, the risks were lower than 1 in 10 and information will be published later. It is important that BHP feel the risks are lower than one in ten, otherwise they wouldnt have come in with FOGL.

FINN: How many companies did FOGL approach?

TB: FOGL approached sixteen companies a year ago - both the majors and super majors. We came up with a list of companies with the financial resources necessary to bring a rig to the Falklands. Ten companies responded to our visit to the United States and to the data we presented. More than half took interest but were on the fence except for BHP.


FINN: What of the others?



TB: Later if more want to come in they might not be able to come if they hesitate too long.


At the public meeting it was surmised that other oil majors will indeed want to come to the Falklands once they felt BHP was on to something.


FINN: How did the CSEM and 3D Seismic reduce the risk?


TB: The CSEM showed a prospective anomaly of 1 in 2 or 1 in 3. There is a chance some major companies might be interested in this data but they havent seen the survey yet. It will be published later this year.


FINN: What will you expect to accomplish next January?


TB: BHP representatives will be coming with us. This will be their first visit to the Falklands. BHP will clearly need meet key people and to see services available - what could be provided. Specialists will also come along who know how to run a drilling programme. It is likely they will take a look at access facilities.



BHP has presented their work to FIG and FOGL and did extensive background work. You might say its now time to hit the gas now the agreement has been announced


FINN: Where will FOGL and BHP begin exploration drilling?


TB: BHP have a short list the same as FOGLs. They have some more technical work to be done before we begin exploration drilling.

.

We will be awaiting the results of Mr Bushells January visit with BHP representatives.

http://www.falklandnews.com/public/story.cfm?get=4698&source=3

FALKLANDS BUSINESS SECTOR LOOKS FORWARD TO JANUARY FOGL/BHP VISIT



By J. Brock (FINN)



Businesses in the Falklands are awaiting the visit of Tim Bushell from Falkland Oil and Gas (FOGL) and representatives from BHP Billiton. While we are being assessed by them, businesses will be vying for position with accommodation, office space, telecommunications and entertainment the list is endless. It is expected that during this phase of the exploration the oil companies will be operating for more than a year.



For their part, the exploration companies must secure the all-important rig. An oil well cannot be designed unless a rig is procured. Six months notice must be given to the Falkland Islands Government prior to any drilling so that wells can be designed. Once that rig is procured things will move quickly.



Day rates for a semi-submersible rig suitable to drill in the Southern and Eastern Falklands basins are now around $500,000.00. Drill ship rates are considerably higher at approximately $700,000.00 per day. Dr. Colin Phipps of Desire Petroleum mentioned in last weeks interview that a drill ship is more self-contained and can move quickly from one prospect to another.



As mentioned prior to the Oil Operators meeting in the Falklands, drilling facilities are not all suitable for the North, South and East Falklands Basins. Hopefully this will bring the operators together to see if there are any viable alternatives for all of them. It could be that BHP will decide to find more than one rig for the Falklands.



One slide that Tim Bushell showed at the Public Meeting showed an LNG facility off Norway. This would require the product coming ashore in the Falklands. The volatile resource would need to be processed here. Dr. Phipps mentioned Gas to Liquids technology that could be operated from a specially designed drill ship. GTL technology produces high grade diesel.



All of this could work for businesses in the Falklands we wait and see.

http://www.falklandnews.com/public/story.cfm?get=4704&source=3

Hydrocarbons Daily Record (11 October 2007)

http://www.fogl.com/documents/FalklandOilandGasLimited-BHPFarmOut-Oct07.pdf

Offshore rig count dips

By Upstream staff


Worldwide offshore rig demand slumped this week to 88% with 593 out of 674 rigs under contract, the ODS-Petrodata Groups weekly survey released today showed.

Worldwide utilization last week was 88.4%

In the US Gulf, utilisation dipped to 69%, with 89 rigs under contract out of 129 a three rig decline over last week.

In Europe, utilisation held at 100% for the 22nd consecutive week with all 103 rigs in the market in use.

In South American waters, 63 of 88 mobile offshore drilling units are under contract this week. Fleet utilization in the region is 71.6%, representing a one-rig decline in the regions contracted fleet over last week.

In the Asia/Australia region, 97 of 98 offshore rigs are under contract.

http://www.sartma.com/art_4631.html

Department of Mineral Resources Overview of Activities During September/October







Offshore Activities







Borders & Southern Petroleum has contracted PGS, a Norwegian geophysical survey company, to carry out a 3D seismic survey in their licensed acreage in the South Falkland Basin. The vessel Ocean Explorer, with six streamers, will acquire 1,500 sq km of data and a chase boat, Amber-G will support operations while in the Islands. The survey is planned to start at the end of October and is expected to last 3 to 4 months depending on weather conditions. Results from the survey which will take several months to process after the data has been acquired will assist BSP in identifying drillable prospects in their acreage.







Rockhopper Exploration has given BGS the processed 3D seismic data acquired earlier in the year by CGG in Rockhopper's northern acreage (PL033). BGS has started work on interpreting the data as has Rockhopper Exploration. As with BSP, Rockhopper Exploration expect that the interpretation work will give them a clearer understanding of the structures that may be oil & gas prone in the licensed area'







FOGL and BFIP Billiton announced their farm-out agreement on 3 October. FOGL is to be congratulated on bringing a major company into the Falkland Islands that is committed to drill wells. Tim Bushell, the CEO of FOGL, will be bringing BHP Billiton representatives to the Islands in January for a familiarisation visit. BHP is already working on drilling plans and rig availability.







Desire Petroleum has continued to work on their 3D data to ensure that the most productive structures in their acreage are drilled. RPS, the environmental consultancy company has been contracted to extend environmental assessment work to Desire's southern blocks so that wells can be drilled there in addition to acreage in quadrants 14 and 15.







A joint meeting of oil companies with production licenses in the Islands was held during the week of 1 October. The meetings were planned back in January and it was fortuitous that FOGL and BHP Billiton made their announcement about the farm-in at the beginning of the week. The news gave the meetings a greater sense of purpose and direction. Meetings were held with FIG, Councillors, MOD, the Chamber of Commerce and Falklands Conservation. A wide section of FIG and the community are well informed about future activities and the oil companies left the Islands with a greater understanding of the need to work together to maximize drilling activities.

Good stuff Marky,see that you still don't get the Penquin News online.

chav good stuff!!

http://www.mercopress.com/vernoticia.do?id=11623&formato=HTML


Falklands: Visiting operators optimistic about oil
THERE is good potential to find significant volumes of oil and gas in the Falkland Islands. Thats the optimistic message from oil industry representatives who were in the Islands last week for a series of meetings with the government, private sector and military.

Snap picture of operatos in Stanley
Zoom

The men from Borders and Southern Petroleum, Rockhopper Petroleum, Desire Petroleum, Argos Resources and Falkland Oil and Gas Ltd (FOGL) hosted a public meeting in the Court and Council Chamber.

Speaking on behalf of the group, Tim Bushell of FOGL, the company which announced an important farm-out agreement with resources giant BHP Billiton last week, said the Islands were not far from large well proven oil basins in South America and, therefore, their hopes of oil or gas finds are high. BHP has committed to drilling at least two wells for FOGL in the next three years.

He spoke of the drilling round held in the late 1990s by some of the big name companies in the industry and said the companies now involved in exploration in the Islands were a new breed who work together. Its becoming a common theme where small companies band together to form a consortium to charter a rig for a period. If you can share between operators it brings down the cost considerably.

Each exploratory well requires around 15m in investment, Mr Bushell said, excluding the cost of mobilising the rig.

Looking ahead, he outlined what the future may hold if oil or gas is discovered in commercial quantities. If oil is found, he said, floating production technology would most likely be used. It is standard technology that would work in a remote environment like this and, in terms of impact to the Falklands, you would see people coming and going but you wouldnt see any onshore plant.

The quickest this could be done after initially finding oil would be at least three years, he said: So if were drilling next year, realistically youre not going to see oil production until 2013/14. If gas is found, the timescale could be much longer and whether or not it is even exploited depends on how much is found. Mr Bushell explained: If we find a lot and we have to talk about trillions of cubic metres - then there is an option which involves bringing the gas onshore and having a plant to liquefy it then put it into ships to take up to the markets.

He showed the meeting a picture of the Snohvit development in Norway, an environment similar to the Falklands, and commented: That is what would be required if we have an LNG plant in the Falklands.

The time scale for this is much longer - it requires a lot more investment to build and youre probably talking ten years away, minimum, before youd see something like this in the Falklands, even if we found gas next year.

John Perry of environmental consultants RPC also briefly addressed the meeting on his companys role in carrying out Environmental Impact Assessments (EIA) and monitoring once drilling begins.

The EIA is a recognised formal process for assessing the likely impact of operations on the environment, and doing as much as possible to mitigate and minimise those impacts. Our job is to check that the drilling companies do what they have said they will do, he explained.

Looking back on the week of meetings with the oil operators, Director of Mineral Resources Phyl Rendell said the Islands were now at an encouraging and challenging time with oil exploration.

She commented: As Tim Bushell said, we are now assured that there will be wells drilled within the next three years due to the willingness of BHP Billiton to invest here.

The oil operators at their joint meetings last week did not flag up any major concerns about managing a second drilling campaign from the Falkland Islands as facilities proved to be adequate in 1998 and many of those facilities have improved since then.

Photo: (l-r) Bruce Farrer (Borders & Southern Petroleum), Dr. Howard Obee (Borders & Southern Petroleum), John Hogan(Argos Resources), Lewis Clifton (Desire Petroleum), Dr Ian Duncan (Desire Petroleum), Cllr Andrea Clausen, Dr Colin Phipps(Desire Petroleum), Sam Moody (Rockhopper Exploration), Tim Bushell (Falkland Oil & Gas Ltd), Dave Bodecott (Rockhopper Exploration), Stephen Luxton (Falkland Oil & Gas Ltd) & Stephen Phipps (Desire Petroleum) (PN)

Interesting that Argos Resources turned up as have'nt heard of them doing anything of late.

http://www.falklandnews.com/public/story.cfm?get=4708&source=3

HYDROCARBONS DAILY RECORD (17 OCTOBER 2007)



By J. Brock (FINN)



TODAYS TOP STORY:





OIL MAJORS PULLING OUT OF NORTH SEA AS WELL AS LATIN AMERICA



By J. Brock (FINN)



South America has now become a very difficult place for oil majors to work. ESSO and Royal Dutch Shell plc want to get out of Argentina and have put assets in Argentina up for sale. Both Shell, Exxon/Mobil and Esso consider Latin America among their smaller business areas and with additional political and economic pressure have decided to cut their losses and pull out. Royal Dutch Shell Plc and Exxon Mobil have also put some Dutch North Sea fields up for sale, in addition to its plans to sell UK North Sea assets. It is well known and speculated that the oil majors are focusing on oil provinces with more potential.



Royal Dutch Shell plc announced on Wednesday that its NAM joint venture with Exxon was selling a number of producing fields in the NOGAT area on the Dutch continental shelf. The press release went on to say that the fields being offered for sale produced around 5.4 million cubic metres of gas and 1,700 barrels of oil per day.



Politics play an important part in the decision to sell assets. Nationalisations like those taking place in Venezuela and Bolivia are not new. The North Sea was a vital production area for oil majors like Shell after they lost rich fields in the Middle East through nationalisations in the 1970s. It is believed that the North Sea is running out of huge commercial reserves and that the fields on offer would suit smaller oil companies.



It is hoped that more oil majors like BHP Billiton will focus on the North, East and South Falklands Basins as the Falklands offer a stable government and economic growth.

http://www.thisislondon.co.uk/news/article-23417114-details/Scramble+for+Antarctica:+Argentina+hits+back+after+Britain+makes+land+grab/article.do

Scramble for Antarctica: Argentina hits back after Britain makes land grab

Tue 23 Oct 2007

The land the world forgot becomes a coveted prize
TANYA THOMPSON (tthompson@scotsman.com)
NOT since the Golden Age of the Empire has Britain staked its claim to such a vast area of land on the world stage. And while the British Empire may be long gone, the Antarctic has emerged as the latest battleground for rival powers competing on several fronts to secure valuable oil-rich territory.

It was once seen as a harsh and barren landscape, an inhospitable wilderness that could yield nothing for mankind and for generations it remained overlooked. But today several countries are vying for a piece of what lies beneath the forgotten continent.

Britain is planning to lay claim to huge tracts of the Antarctic, with the Foreign Office drawing up a submission to the United Nations that 386,000 sq miles of sea bed in the south Atlantic should be declared British.

And the reason for the sudden interest? The area is thought to contain lucrative reserves of oil and natural gas, although under the 1959 Antarctic Treaty the search for these reserves could not begin until 2048.

Opponents of the British move - including Argentina and Greenpeace - say that any submission would breach the spirit of the treaty, which was designed to prevent new claims.

The British first made their mark on Antarctica in 1908 and the British Antarctic Territory now stretches out 666,000 sq miles from the South Pole, although parts of it are disputed by Argentina and Chile. Four other countries, Norway, Australia, France and New Zealand, have substantial interests on the continent.

The move is the latest example of a rush to claim land through the Arctic and Antarctic by states seeking to boost their energy resources. Russia has asserted its right to land beneath the Arctic Ocean and France claimed land around New Caledonia, in the Pacific.

But it seems certain that claims submitted by the British will be challenged by other states as the areas covered are the subject of several long-standing and bitter territorial disputes.

Details of the submission to the UN will be one of five similar claims that Britain has on its radar - in the Bay of Biscay, around Ascension, off the British Antarctic Territory, around the Falkland Islands and South Georgia and in the Hatton-Rockall basin. These sites, the Foreign Office insists, meet the "geological conditions required" and Britain is merely "safeguarding for the future".

The 'land grab' is part of a UN treaty that allows coastal countries to claim a continental shelf up to 380 miles off their shores, and the right to search for oil and natural gas there. Britain is one of nine countries that have filed such claims, and more are expected.

The Foreign Office explained: "It's incredibly unlikely that the Antarctic Treaty would ever be abolished but in order to safeguard our interests for the time being, we are submitting a claim."

Environmental campaigners are furious at the proposals and have condemned them at a time when there is growing pressure on governments to reduce carbon footprints.

"In April, the British Foreign Secretary, Margaret Beckett, took climate change to the UN Security Council for the first time," said John Sauven, executive director of Greenpeace UK.

"Six months on, the same Foreign Office is claiming ownership of one of the world's last remaining pristine ecosystems to drill for more fossil fuels.

"The approach reflects the kind of incoherent thinking on climate change that this government has continually demonstrated. If global emissions are to peak and be in decline in the next 100 months - as the scientists warn is necessary - this dash to Antarctica is totally reckless."

The days of British Imperialism may be behind us, but critics fear we are trying to carve out a new empire, with serious political repercussions.

Martin Pratt, director of research at the International Boundaries Research Unit at Durham University, says there is a fundamental disagreement about who owns the land.

"The basis for the claim is that Britain can claim sovereignty under the British Antarctic Territory... but the problem is that the United Kingdom, Chile and Argentina all dispute that territory.

"Legally, Britain is perfectly entitled to [submit this] in the same way that Britain believes it has sovereignty over the Falklands."

Mr Pratt, who has advised countless governments and oil companies on boundary disputes, is convinced that the demand for fossil fuels will force a nation to break the Treaty.

"Unless alternative energy is found, it's inevitable that they'll tap into this area for oil and gas. Look what happened in the Falklands in 1992. But this is an uninhabited continent and there would be heavy diplomacy and sanctions if a war was about to be fought over Antarctica."

Britain's aspiration to expand its sovereignty could trigger disputes with Argentina and Chile, which are likely to make overlapping claims.

The move is widely seen as a direct challenge to the 50-year-old international treaty - aimed at preserving the frozen continent's fragile environment from commercial and military exploitation.

Britain is not alone in its plans. A number of other countries submitting claims to the UN Commission on the Limits of the Continental Shelf are Russia, Brazil, Australia, Ireland, New Zealand, France, Spain and Norway.

This summer saw a heightening of tensions over Arctic sovereignty and potential oil riches highlighted by record melting of the polar ice cap and a Russian flag-planting mission at the North Pole seabed.

And news of the planned UK claim in Antarctica has raised the spectre of a battle over the southern polar region, with British experts predicting a possible end to the Antarctic Treaty and a looming threat to the southern polar environment.

Martyn Williams, from Friends of the Earth, is not convinced by the Foreign Office's attempt to downplay the prospect of a free-for-all at the South Pole.

"It really doesn't matter whose oil it is. Running around looking for more oil is not compatible with tackling climate change.

"Nor does it matter whether the oil is taken from a white, pristine environment or a dirty, ugly one. The damage to the environment will affect everyone."

Nations scramble to stake a claim to lands the size of Australia
SOME 45 countries with coastlines qualify for potential "extended underwater territory" rights under the UN Law of the Sea Convention.

It has provoked a scramble for underwater land almost as fierce as the one for Africa in the 19th century, when European countries divided up the continent.

As much as 2.7million sq miles - an area similar to the size of Australia - is believed to be at stake. It includes the Arctic, where Russia recently claimed land below the North Pole, new islands off India which emerged from the sea, and Pacific Ocean islands claimed by Australia.

But to claim the new underwater territory, countries must be able to show that it is an extension of their own topography.

All claims must be staked by 2009, which is why there is a rush to gather scientific evidence to support submissions.

Britain is preparing territorial claims on tens of thousands of square miles of the Atlantic Ocean floor around the Falklands and Rockall island in the hope of annexing potentially lucrative oil and gas fields.

The Falklands claim has the most potential for political fall-out, given that Britain and Argentina fought over the islands 25 years ago, and the value of the oil under the sea in the region is understood to be immense. Seismic tests suggest there could be about 60 billion barrels of oil under the ocean floor.

Talks have already begun between Ireland, Iceland and Denmark for the division of rights far out into the north Atlantic. It includes the island of Rockall and the sub-sea Hatton ridge. The claims are not close to final resolution, although Ireland and the UK have agreed a common boundary.

Other countries which have submitted claims to the ocean floors around remote overseas dependencies have run into fierce opposition from neighbouring nations.

France, which registered its claim to thousands of square miles around New Caledonia, in the Pacific, has received protests from Vanuatu warning the claim has "serious implications on Vanuatu's legal and traditional sovereignty". Russia was heavily criticised for making claims beneath the Arctic Ocean.

http://www.desireplc.co.uk/pdfs/Shareholders_FI_1007.ppt

The Falklands Presentation to its shareholders

serious amount of buying this morning....spring around the corner for the island of penguins and oil

watcher

Fans structures found in Falklands



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