TN PETRÓLEO

Falkland Islands oil explorer Borders & Southern Petroleum announced Wednesday that it has spud its exploration well 61/17-1, which is designed to test the Darwin East prospect. Borders is the operator of the well, having a 100-percent interest in license PL018. The spud occurs amid rising diplomatic tensions between Argentina and the UK government about the Falkland Islands' sovereignty.

 

 

Darwin East is located in the South Falklands Basin in the South Atlantic, some 87 miles (140 kilometers) south of the Falkland Islands. The prospect is a fault/dip closed structure with a Lower Cretaceous sandstone, reservoir target.

 

 

Any success by the firm would likely be significant since no oil has yet been found in the South Falklands Basin, unlike in the zone north of the Falkland Islands where fellow UK firm Rockhopper Exploration made an oil discovery on its Sea Lion target in 2010.

 

 

The 61/17-1 exploration well will investigate geophysical attributes that include a flat spot, amplitude conformance to structure and an AVO (amplitude versus offset) anomaly. 

 

 

The identification of an AVO means reduced exploration risk according to Leila Reddy – an oil industry analyst at investment bank Panmure Gordon (which also acts as broker to Borders). In a research note on the company released Wednesday, Reddy wrote that Borders' management is targeting P50 recoverable resources of 300 million barrels for the amplitude anomaly and up to 760 million barrels for the entire structure.

 

 

The well – which is expected to cost around $50 million and take about 45 days to complete – is the first of a two-well exploration program. Borders is using the Leiv Eiriksson (UDW semisub) rig for the work.

 

 

In recent weeks there have been rising tensions between the Argentine and UK governments over the Falkland Islands – a British Overseas Territory that Argentina claims as its own. The UK fought and won a war against Argentina over the islands in 1982 and, as the 30th anniversary of that conflict nears, the two countries have been engaged in a diplomatic war of words about the sovereignty of the islands.