‘Huge economic significance’ of Falklands oil dispute

I’ve been planning to visit the Ocean Guardian for about three months. We had originally planned to go on it and film, as I had filmed with a Norwegian oil company that was the first to hit oil in Iraq after the war.

The transfer of the Ocean Guardian from the North Sea to the Liz prospect north of the Falklands is far more than a story of simple hydrocarbon exploration. This is a story of historical, diplomatic and potentially huge economic significance.

As it happened, when the call came through that it was about to arrive and be filmable, I could not get to Brize Norton, and our business reporter John Sparks, Simon Stanleigh and cameraman Bruce Shayler did a superb job of getting a fly-past on the now-anchored rig.

Of course this is now at the centre of a diplomatic spat between Argentina and the UK. There’s nothing like an oil find to ignite territorial disputes, as my time in Iraq two years ago illustrated.

It’s worth noting that some of the major oil companies are rather sniffy about all this. Shell did not make a “commercial find”.

What has changed now is that the oil price at $75 is much higher, yet the demand for oil has slowed, meaning that hiring the Ocean Guardian became commercially viable.

It will now spend the next few months drilling prospects for four different small oil companies. Desire Petroleum say they will start on Monday, and expect first results in 30 days. Top estimates suggest 60 billion barrels or around the same as the North Sea.

Just how much of that is recoverable is what the Ocean Guardian will determine. And as the North Sea runs drier, it could yet represent a much needed boost to the UK exchequer’s dwindling coffers.