British firm defends Falklands oil extraction plans despite Milei threats
Argentina’s President Javier Milei has reiterated the country’s claim on the Falkland Islands and said he would introduce sanctions on any oil companies working in the area.
A British-based oil exploration company has said it does not expect threats by the Argentinian government to have a “material effect” on its offshore oil project near the Falkland Islands.
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London-listed Rockhopper saw its shares slide on Friday morning after Argentina’s president said he will sanction firms working off the coast of the territory.
Rockhopper and Israeli partner Navitas are working together on the Sea Lion project to extract oil north of the Falklands, which is expected to start delivering oil in 2028.
On Friday, Argentinian President Javier Milei said he would sign decrees to introduce sanctions against any companies working on oil production in the area.
He declared the Sea Lion oilfield a “clear and present danger” to the country’s claims.
Read more: Why does the UK control the Falklands and will Argentina try and get them back?
It came as Mr Milei said his country needed to take the Falklands back, renewing tensions after President Donald Trump hinted the US would not help the UK in a future Falklands conflict.
In a statement, Rockhopper and Navitas said: “The partnership operates pursuant to valid petroleum licences lawfully granted to it by the government of the Falkland Islands, a self-governing UK Overseas Territory, and with the full and ongoing support of the UK Government.
“The partnership believes that the recent developments are not expected to have a material effect on the development activities of the Sea Lion project, including the timetable for completion of the project’s development.”
Nevertheless, shares in Rockhopper were around 6.5% lower at 72.9p as the situation knocked investor sentiment.
Rockhopper was founded in 2004 to explore for oil and gas around the Falkland Islands, and owns offshore exploration and production licences in the North Falkland Basin.
The company first started drilling an exploration well for Sea Lion, which is around 170 miles north of the Falkland Islands, in 2010.
Sea Lion, which is 65% owned by Navitas and 35% owned by Rockhopper, confirmed its final investment plans last year with proposals to start producing oil in 2028.
The first phase of development on the project is expected to cost around 2.1 billion US dollars (£1.55 billion).
The oil field is believed to contain the equivalent of 900 barrels of oil.
It is understood that the Falkland Islands’ government will take a 9% royalty on revenues from the oil field.
Mr Milei reiterated the country’s claim on the Falkland Islands on Thursday and said he would introduce sanctions on any oil companies working in the area.
Mr Milei said: “I want to be quite clear with everybody. The Falklands are Argentinian. Historically and legally.
“There can be no argument. They are part of the Argentine territory.
“The islanders on their usurped territory do not have a legitimate right to self-determination and any argument on any such self-determination is invalid.”