What a fine day to strike black gold

..as Daniel Day Lewis said in the seminal oil man film There Will Be Blood. Somewhere in the South Atlantic, in the North Falkland basin.

Rockhopper’s leased oil rig, the Ocean Guardian, has hit oil. “Well 14/10-2 on the Sea Lion prospect has reached a depth of 2,744 metres. Initial data collected indicate that this well is an oil discovery, which would be the first in the North Falkland Basin.”

Channel 4 News has been tracking the prospects of oil around the Falklands for some time. My colleague John Sparks flew out to the south Atlantic in February when drilling commenced.

Rockhopper hit oil at the first attempt at Sea Lion, after a previous exploration of the Liz prospect by Desire Petroleum drew blank. Rockhopper’s share price surged 150 per cent on the news dragging up other small companies’ share price too.

It’s not yet possible to tell how many millions of barrels Rockhopper has discovered, but it has made the first step along the road of a commercial find. More testing is required before the size of the find becomes apparent.

It was always known that the Falklands sits on a bed of the black stuff. What matters is how much of it is commercially viable to recover. The basic answer is that far more is commercially viable with an oil price at $80 per barrel than it was in 1998 when Shell abandoned some small finds in the vicinity of today’s Rockhopper find with the oil price barely above $10.

Eyebrow-raising estimates suggest as much as 60 billion barrels across the whole of the Falklands, basically another North Sea – a figure scoffed at by many of the Big Oil executives I have spoken to.

For his part, Samuel Moody, Rockhopper’s managing director, said: “We are extremely excited by the results of this well.  While we are presently acquiring additional data, current indications are that we have made the first oil discovery in the North Falkland Basin’.

So we don’t know how much oil there is, but we now know there is some. This holds out the prospect of a transformative find for the UK, and possibly divine intervention on our nation’s long-term debts (there’s no chance that anything could come on stream in time to pay down the current deficit problem).

I am certain that if there are big finds, the UK Treasury will adopt a hefty share of the proceeds. There will be tension and careful negotiation with Argentina. Only last week Buenos Aires reimposed restrictions on maritime traffic between Argentina and the Falklands.

Remember that historians could argue that North Sea oil was as momentous for Britain as many single elections. Depending on how much of the black stuff eventually makes it out of the ground, this press release from a company, named after a type of penguin, that you have never heard of, could become as momentous as the small political earthquake hitting Britain today.