US oil company, Andarko is considering a US$1.6bn investment in the British explorer, Rockhopper, in exchange for access to British oil reserves in the Falklands/Malvinas.
The company that worked alongside BP in their ill-fated Deep Water Horizon well in the Gulf of Mexico is reputed to have sent four executives from the oil firm to the islands to meet with members of the UK explorer last week. The Houston-based petroleum corporation joins a growing list of potential investors attracted to the 500-m oilfield, with an estimate 700 million barrels of crude oil, discovered in the southeastern region of the island last September.
Rockhopper has appointed Bank of America Merrill Lynch to oversea funding for its Sea Lion reservoir, which will be confirmed by the end of March, in preparation for commercial production, due to start in 2016. The funding options range from debt-funding, equity injection to joint partnership. Six offers have already been made: two from British firms, Cairn energy and Premier oil; the rest from US corporations, Hess, Noble and Murphy.
The proposal comes in the midst of the latest bilateral diplomatic dispute, revived in recent days by British Prime Minister, David Cameron’s accusation of Argentina’s “colonialism” in its claims to the Falklands/Malvinas islands last Wednesday.
Andarko’s proposal is reported to have backing from the highest political echelons in the Pentagon. The deal between US and UK directors, intended to strengthen oil activity in the Southern Atlantic platform, comes to light despite the US government’s recent statement of neutrality in respect to the ongoing dispute between Argentina and the UK over the governance of the islands.
In a recent press conference, Victoria Nuland, the spokeswoman for the U.S. State Department, said that while the US “recognises the de facto UK administration of the Falkands/Malvinas … it takes no position regarding sovereignty”.
The decision taken by the US firm has emerged on the same day as the installation of the second British oil platform in the Falklands/Malvinas, thus further aggravating an already escalating dispute.