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Falklands set to increase drilling for oil

STANLEY, Falkland Islands, Dec. 21 (UPI) -- The British-ruled Falkland Islands government and oil companies contracted to explore for deep-sea oil will increase drilling operations in 2011 and reinforce this year's result with a designated Discovery Area in the South Atlantic.

Falklands oil exploration became a contentious issue when Argentina challenged Britain's right to tap oil in the North Falklands Basin, disputing the sovereignty of both Britain and the Falkland Islands government.

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Argentina invaded Falkland Islands, a British overseas territory, in 1982 but was repulsed, with the loss of more than 1,000 lives on both sides.

The rise of the Falklands as a potentially oil-rich region gave Argentina new ammunition to push its sovereignty claim. It won support for its stand at Latin American forums, including the Union of South American Nations and Mercosur trade pact.

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Despite signs that Argentine sovereignty claims will gain momentum in the coming months shareholders in the oil prospecting operations received a pre-Christmas boost with Monday's announcement of a new drilling season.

The Rockhopper Exploration company reiterated its commitment to Falklands' oil quest and set out plans to increase the number of its drilling options and 3-D seismic surveys. The company is in talks with the Falklands' government for a formal declaration of a Discovery Area where Rockhopper earlier struck oil.

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Other oil companies active on the islands, including Desire Petroleum, have indicated they want to increase drilling options in the new year.

RELATED Desire Petroleum hopeful of new Falklands oil find

The companies have shared use of the Ocean Guardian drilling rig they leased from Scotland in 2009.

"We are delighted to have secured the use of the Ocean Guardian for a further two wells and we are in discussions to secure further drilling slots," Rockhopper Chief Executive Sam Moody said. "We expect to undertake a significant drilling program during 2011, including a number of appraisal and exploration wells designed to refine our understanding of our northern licenses."

The Discovery Area is likely to include the Sea Lion discovery well 14/10-2, which was found to contain oil in commercial quantities.

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Additional drilling due to begin in January will be outside the proposed Discovery Area, Rockhopper said in a news release. Rockhopper says it has identified a number of other potential locations where it plans to conduct appraisal and exploration drilling.

The company has also commissioned a seismic survey, being conducted by MV Polarcus Nadia and likely to end in April.

Rockhopper was launched in 2004 with a strategy to invest in and carry out an offshore oil exploration program in the North Falkland Basin and adjoining areas.

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