Argentina is preparing to start drilling for oil close to the Falkland Islands using a super-drillship rig hired from Stena Drilling, a unit of Sweden’s Stena Group.
A joint venture comprising YPF (Argentine unit of Spanish group Repsol), Petrobras of Brazil and Pan American Energy (a joint venture between BP 60% and Argentine company Bridas 40%) has been formed to carry out the campaign.
Despite the tensions that exist between the UK and Argentina over the Falkland Islands, BP appears content to risk criticism, even controversy.
It is hard to get an accurate fix on the programme’s content. This has not been helped by Stena’s name being widely misreported in the press as Stensa.
However, it looks as if the planned exploration well will be drilled towards the end of the current year. It is understood that Argentina had hoped to drill the well much earlier . . . late last year apparently as part of a five-year programme. Reported budget for the “Malvinas” probe is $150million.
Stena Drilling, which is located in Aberdeen, was selected because of its existing relationship with Petrobras and Repsol YPF.
The Brazilian oil company is one of the Swedish group’s biggest client, particularly because of tanker traffic, while Repsol is a past and current client on the drilling front.
Energy has ascertained that the drilling unit scheduled to carry out the work is the Stena DrillMAX, which is currently on contract to Repsol YPF and working in the Brazilian sector.
The DrillMAX is a harsh environment, ultra-deepwater capability unit designed to cope with hostile conditions of the kind likely to be encountered in the South Atlantic.
The location chosen to start the campaign in December is reported to be some 290km offshore, halfway between the Falkland Islands and Tierra del Fuego (southern tip of South America).
Water depth over this portion of the so-called Malvinas Basin is reported to be 1,500m.
Argentina’s minister of defence, Nilda Garre , has been reported as saying that the upcoming exploration campaign in the south-west Atlantic is intended to contain the “encroaching” British companies and is further evidence of Argentine sovereignty over the area.
The initiative is seen as a robust response by Argentina to the current exploration campaign taking place in Falklands’ waters which the government of President Cristina Kirchner has condemned and rejected as “illegal” since these are “disputed waters”.
Meanwhile, relations between the UK and Brazil have just been reinforced following the signing of a Defence Co-operation Treaty between the two countries.
UK minister for international security strategy, Gerald Howarth, signed the treaty with the commander of the Brazilian Navy, Admiral Moura Neto.
Brazil is an important market for the UK, including on the energy front. It remains to be seen what if any impact this has with regard to the Falklands.