Falklands oil: Much ado about nothing?

Tensions between Britain and Argentina over the sovereignty of the Falklands Islands/Islas Malvinas climaxed recently over an oil exploration deal. Faced with a possible “oil rush” near the disputed islands, the Argentine government tried to drum up regional support to impede drilling in the area. Eventually British company Desire Petroleum was able to tow a drill rig from Scotland southbound to the Falklands area.

Despite the rising tensions caused by the oil exploration plans it may ultimately turn out to be a bust for Desire. Preliminary drilling has yielded “disappointing” results that caused the firm’s stock to plummet by 50%. Early analysis from drilling off the coast off the Falkands showed "that oil may be present in thin intervals but that reservoir quality is poor". The company advised that further tests would be done this week in order to see if they could salvage something.

Desire’s actions have also caused double-digit stock losses in two other British oil firms working around the Falklands- Rockhopper and Falkland Oil and Gas. Desire faces a disheartening loss similar to what occurred over a decade ago:

If subsequent drilling yields the same disappointing results as Desire's first well, then this will be the second time in 13 years that a Falklands oil boom has ended in tears. In May 1998, Desire's shares crashed by 30% after a drilling operation in the North Falklands basin found that hydrocarbons were present, but not in commercial quantities.

Image- BBC News (“Desire's oil platform was moved from Scotland to the Falklands in February.”)
Online Sources- RTT News, CNN, The Latin Americanist, Guardian UK, BBC News