Falkland Oil and Gas (FOG), said today it was in talks with potential partners for its closely-watched exploration activities in the South Atlantic.
A rig, the Leiv Erikson, which has been drilling near Greenland for Edinburgh-based explorer Cairn Energy, is expected to arrive in the Falklands in late January 2012.
It is slated to drill two wells for Borders and Southern, another UK explorer, and two for FOG.
FOG said it expected to start drilling its Loligo prospect in its northern license areas during the second quarter of next year
The remote islands in the South Atlantic are poised to be transformed into an oil producing area after Rockhopper, a third UK firm, made a large discovery in 2010.
But the prospect of the British-governed islands becoming an oil province is controversial as Argentina claims sovereignty over them.
Las Malvinas, the name the Falklands are known by throughout Latin America, are just 300 miles from Argentina’s coast.
FOG said it was fully-funded to drill its first well but a second could require it to secure additional finance, depending on the depth and expense of the first.
It added: “The company continues its discussions with a number of oil companies who have expressed an interest in participating in FOG’s exploration drilling programme and a successful conclusion to these would provide greater flexibility.”
Chief executive Tim Bushell said preparation for FOG’s drilling campaign was continuing apace, adding: “We are in the fortunate position of having a number of high potential prospects across a range of different play types, from which to select the second well target.
“We will be able to take advantage of information gained from both Loligo and the wells being drilled by Borders and Southern in making this decision.”
The world’s largest miner, BHP Billiton, was previously partnered with FOG on its licenses but withdrew earlier this year.