

Currently released so far... 12404 / 251,287
Browse latest releases
2010/12/01
2010/12/02
2010/12/03
2010/12/04
2010/12/05
2010/12/06
2010/12/07
2010/12/08
2010/12/09
2010/12/10
2010/12/11
2010/12/12
2010/12/13
2010/12/14
2010/12/15
2010/12/16
2010/12/17
2010/12/18
2010/12/19
2010/12/20
2010/12/21
2010/12/22
2010/12/23
2010/12/24
2010/12/25
2010/12/26
2010/12/27
2010/12/28
2010/12/29
2010/12/30
2011/01/01
2011/01/02
2011/01/04
2011/01/05
2011/01/07
2011/01/09
2011/01/10
2011/01/11
2011/01/12
2011/01/13
2011/01/14
2011/01/15
2011/01/16
2011/01/17
2011/01/18
2011/01/19
2011/01/20
2011/01/21
2011/01/22
2011/01/23
2011/01/24
2011/01/25
2011/01/26
2011/01/27
2011/01/28
2011/01/29
2011/01/30
2011/01/31
2011/02/01
2011/02/02
2011/02/03
2011/02/04
2011/02/05
2011/02/06
2011/02/07
2011/02/08
2011/02/09
2011/02/10
2011/02/11
2011/02/12
2011/02/13
2011/02/14
2011/02/15
2011/02/16
2011/02/17
2011/02/18
2011/02/19
2011/02/20
2011/02/21
2011/02/22
2011/02/23
2011/02/24
2011/02/25
2011/02/26
2011/02/27
2011/02/28
2011/03/01
2011/03/02
2011/03/03
2011/03/04
2011/03/05
2011/03/06
2011/03/07
2011/03/08
2011/03/09
2011/03/10
2011/03/11
2011/03/13
2011/03/14
2011/03/15
2011/03/16
2011/03/17
2011/03/18
2011/03/19
2011/03/20
2011/03/21
2011/03/22
2011/03/23
2011/03/24
2011/03/25
2011/03/26
2011/03/27
2011/03/28
2011/03/29
2011/03/30
2011/03/31
2011/04/01
2011/04/02
2011/04/03
2011/04/04
2011/04/05
2011/04/06
2011/04/07
2011/04/08
2011/04/09
2011/04/10
2011/04/11
2011/04/12
2011/04/13
2011/04/14
2011/04/15
2011/04/16
2011/04/17
2011/04/18
2011/04/19
2011/04/20
2011/04/21
2011/04/22
2011/04/23
2011/04/24
2011/04/25
2011/04/26
2011/04/27
2011/04/28
2011/04/29
2011/04/30
Browse by creation date
Browse by origin
Embassy Athens
Embassy Asuncion
Embassy Astana
Embassy Asmara
Embassy Ashgabat
Embassy Apia
Embassy Ankara
Embassy Amman
Embassy Algiers
Embassy Addis Ababa
Embassy Accra
Embassy Abuja
Embassy Abu Dhabi
Embassy Abidjan
Consulate Auckland
Consulate Amsterdam
Consulate Adana
American Institute Taiwan, Taipei
Embassy Bujumbura
Embassy Buenos Aires
Embassy Budapest
Embassy Bucharest
Embassy Brussels
Embassy Bridgetown
Embassy Bratislava
Embassy Brasilia
Embassy Bogota
Embassy Bishkek
Embassy Bern
Embassy Berlin
Embassy Belmopan
Embassy Belgrade
Embassy Beirut
Embassy Beijing
Embassy Banjul
Embassy Bangkok
Embassy Bandar Seri Begawan
Embassy Bamako
Embassy Baku
Embassy Baghdad
Consulate Barcelona
Embassy Copenhagen
Embassy Conakry
Embassy Colombo
Embassy Chisinau
Embassy Caracas
Embassy Canberra
Embassy Cairo
Consulate Curacao
Consulate Ciudad Juarez
Consulate Chennai
Consulate Casablanca
Consulate Cape Town
Consulate Calgary
Embassy Dushanbe
Embassy Dublin
Embassy Doha
Embassy Djibouti
Embassy Dili
Embassy Dhaka
Embassy Dar Es Salaam
Embassy Damascus
Embassy Dakar
Consulate Dubai
Embassy Helsinki
Embassy Harare
Embassy Hanoi
Consulate Ho Chi Minh City
Consulate Hermosillo
Consulate Hamilton
Consulate Hamburg
Consulate Halifax
Embassy Kyiv
Embassy Kuwait
Embassy Kuala Lumpur
Embassy Kinshasa
Embassy Kingston
Embassy Kigali
Embassy Khartoum
Embassy Kathmandu
Embassy Kampala
Embassy Kabul
Consulate Kolkata
Embassy Luxembourg
Embassy Luanda
Embassy London
Embassy Ljubljana
Embassy Lisbon
Embassy Lima
Embassy Lilongwe
Embassy La Paz
Consulate Lahore
Consulate Lagos
Mission USOSCE
Mission USNATO
Mission UNESCO
Embassy Muscat
Embassy Moscow
Embassy Montevideo
Embassy Monrovia
Embassy Minsk
Embassy Mexico
Embassy Mbabane
Embassy Maputo
Embassy Manila
Embassy Manama
Embassy Managua
Embassy Malabo
Embassy Madrid
Consulate Munich
Consulate Mumbai
Consulate Montreal
Consulate Monterrey
Consulate Milan
Consulate Melbourne
Embassy Nicosia
Embassy New Delhi
Embassy Ndjamena
Embassy Nassau
Embassy Nairobi
Consulate Naples
Consulate Naha
Embassy Pristina
Embassy Pretoria
Embassy Prague
Embassy Port Of Spain
Embassy Port Louis
Embassy Port Au Prince
Embassy Phnom Penh
Embassy Paris
Embassy Paramaribo
Embassy Panama
Consulate Peshawar
REO Basrah
Embassy Rome
Embassy Riyadh
Embassy Riga
Embassy Reykjavik
Embassy Rangoon
Embassy Rabat
Consulate Rio De Janeiro
Consulate Recife
Secretary of State
Embassy Suva
Embassy Stockholm
Embassy Sofia
Embassy Skopje
Embassy Singapore
Embassy Seoul
Embassy Sarajevo
Embassy Santo Domingo
Embassy Santiago
Embassy Sanaa
Embassy San Salvador
Embassy San Jose
Consulate Strasbourg
Consulate St Petersburg
Consulate Shenyang
Consulate Shanghai
Consulate Sao Paulo
Embassy Tunis
Embassy Tripoli
Embassy Tokyo
Embassy The Hague
Embassy Tel Aviv
Embassy Tehran
Embassy Tegucigalpa
Embassy Tbilisi
Embassy Tashkent
Embassy Tallinn
Consulate Toronto
Consulate Tijuana
USUN New York
USEU Brussels
US Office Almaty
US Mission Geneva
US Interests Section Havana
US Delegation, Secretary
UNVIE
Embassy Ulaanbaatar
Embassy Vilnius
Embassy Vienna
Embassy Vatican
Embassy Valletta
Consulate Vladivostok
Consulate Vancouver
Browse by tag
ASEC
AE
AF
AM
AR
AJ
AU
AORC
AG
AEMR
AMGT
APER
AGMT
AL
AFIN
AO
AMED
ADCO
AS
ABUD
ABLD
ASUP
ASECKFRDCVISKIRFPHUMSMIGEG
APECO
AID
AND
AMBASSADOR
AN
ARM
AY
AODE
AMG
ASCH
AMCHAMS
ARF
APCS
APEC
ASEAN
AGAO
ANET
ADPM
ACOA
ACABQ
AORL
AFFAIRS
ATRN
ACS
AFSI
AFSN
ADANA
ASIG
AA
AX
AUC
AC
AECL
AADP
AGRICULTURE
AMEX
ACAO
ACBAQ
AQ
AORG
ADM
AINF
AIT
ASEX
AGR
AROC
ATFN
AFGHANISTAN
AFU
AER
ALOW
AZ
AVERY
BA
BY
BU
BR
BE
BL
BO
BK
BM
BILAT
BH
BEXP
BF
BTIO
BC
BBSR
BMGT
BTIU
BG
BWC
BB
BD
BX
BP
BRUSSELS
BN
BIDEN
BT
CW
CH
CF
CD
CV
CVIS
CM
CE
CA
CJAN
CLINTON
CIA
CU
CASC
CI
CO
CACM
CDB
CN
CMGT
CS
CG
CBW
CIS
CR
CONDOLEEZZA
CPAS
CAN
CWC
CY
COUNTER
CDG
CL
CT
CIC
CIDA
CSW
CHR
CB
CODEL
COUNTERTERRORISM
CTR
COM
CICTE
CFED
CJUS
CKGR
CBSA
CEUDA
CARSON
CONS
CITEL
CLMT
CROS
CITT
CAC
CVR
CDC
CAPC
COPUOS
CBC
CBE
CARICOM
COE
COUNTRY
CLEARANCE
CACS
CTM
CNARC
ECON
EFIN
ETRD
EUN
EFIS
EG
ETTC
EZ
EPET
EAID
EAGR
ENRG
ECUN
EU
ELAB
ECPS
EAIR
EINV
ELTN
EWWT
EIND
EMIN
EI
ECIN
ENVR
ELECTIONS
EINVEFIN
EN
ES
ER
EC
EUC
EINT
EINVETC
ENGR
ET
EK
ENIV
ETRDEINVECINPGOVCS
ECONOMY
EAP
EFTA
EUR
EUMEM
EXIM
ERD
ENERG
EUREM
ESA
ERNG
EXTERNAL
EPA
EINVECONSENVCSJA
ECONOMICS
ELN
EINN
EFINECONCS
ENNP
EEPET
ETRDEINVTINTCS
ENVI
ETRO
ESENV
ECINECONCS
ECONOMIC
EAIDS
EDU
ETRA
ETRN
EFIM
EIAR
ETRC
EAIG
EXBS
EURN
ECIP
EREL
ECA
ENGY
ECONCS
ECONEFIN
ETC
ETRDECONWTOCS
EUNCH
EINDETRD
IR
IZ
IS
IAEA
INRB
IRAJ
IQ
IN
IT
IMO
INTERPOL
ICAO
IO
IC
ITALY
ITALIAN
IRAQI
ICTY
ID
IPR
IWC
ILC
INTELSAT
IL
IBRD
IMF
IA
IRC
ICRC
ILO
ITU
ITRA
IV
IDA
IAHRC
ICJ
ISRAELI
IRS
INMARSAT
ISRAEL
ISLAMISTS
INDO
IZPREL
ITPHUM
ITPGOV
ITF
IBET
IEFIN
INR
IACI
INTERNAL
IDP
IGAD
IEA
ICTR
IIP
INRA
INRO
IF
KJUS
KSCA
KNNP
KU
KCOR
KCRM
KDEM
KTFN
KHLS
KPAL
KWBG
KACT
KGHG
KPAO
KTIA
KIRF
KWMN
KS
KG
KZ
KN
KMDR
KISL
KSPR
KHIV
KPRP
KAWK
KR
KUNR
KDRG
KCIP
KGCC
KTIP
KSUM
KPKO
KVIR
KAWC
KPIN
KGIC
KRAD
KIPR
KOLY
KCFE
KMCA
KE
KV
KICC
KNPP
KBCT
KSEP
KFRD
KFLU
KVPR
KOCI
KBIO
KSTH
KMPI
KCRS
KOMC
KTBT
KPLS
KIRC
KREL
KFRDKIRFCVISCMGTKOCIASECPHUMSMIGEG
KFLO
KBTS
KSTC
KTDB
KFSC
KX
KFTFN
KNEI
KIDE
KREC
KMRS
KICA
KPAONZ
KCGC
KSAF
KRGY
KCMR
KRVC
KVRP
KSEO
KCOM
KAID
KTEX
KNUC
KNAR
KNUP
KNNPMNUC
KLIG
KFRDCVISCMGTCASCKOCIASECPHUMSMIGEG
KCRCM
KHDP
KGIT
KNSD
KOMS
KWMM
KPAI
KHSA
KTLA
KO
KMFO
KRCM
KCSY
KSAC
KTRD
KPWR
KID
KWNM
KRIM
KPOA
KCHG
KOM
KSCI
KFIN
KMOC
KESS
KWAC
KMIG
KSEC
KIFR
KDEMAF
KPRV
KBTR
KERG
KTER
KDDG
KPAK
KRFD
KHUM
KDEV
KCFC
KWWMN
KWMNCS
KJUST
MARR
MOPS
MU
MTCRE
MNUC
MY
MASS
MCAP
MOPPS
MAR
MPOS
MO
ML
MR
MASC
MX
MD
MP
MA
MTRE
MIL
MCC
MZ
MK
MDC
MRCRE
MAPS
MV
MI
MEPN
MAPP
MEETINGS
MAS
MTS
MLS
MILI
MTCR
MG
MC
MARAD
MIK
MILITARY
MEDIA
MEPI
MUCN
MEPP
MT
MERCOSUR
MW
MASSMNUC
MQADHAFI
NZ
NATO
NG
NI
NO
NATIONAL
NU
NPT
NIPP
NL
NPG
NS
NA
NGO
NP
NSG
NDP
NAFTA
NR
NC
NH
NE
NSF
NPA
NK
NSSP
NRR
NATOPREL
NSC
NT
NW
NORAD
NEW
NV
NSFO
NAR
NASA
NZUS
OTRA
OVIP
OPRC
OPDC
OSCE
OAS
ODIP
OIIP
OFDP
OVP
OREP
OFFICIALS
OSAC
OEXC
OPCW
OIE
OIC
OFDA
OSCI
OPIC
OBSP
OECD
ON
OCII
OHUM
OES
OCS
OMIG
OPAD
OTR
PGOV
PREL
PHUM
PINR
PTER
PSOE
PINS
PARM
PK
PBTS
PEPR
PM
POLITICAL
PARTIES
PREF
PBIO
PROP
PA
PSI
PINT
PO
PKFK
PL
PAK
PE
POLITICS
PINL
POL
PHSA
PU
PF
POV
PFOR
PHALANAGE
PARTY
PARMS
PRGOV
PNAT
POLINT
PRAM
PMAR
PG
PAO
PROG
PRELP
PPA
PCUL
PSEPC
PSA
PREO
PAHO
PGIV
PREFA
PALESTINIAN
PAIGH
POSTS
PTBS
PGOVLO
PORG
PGOVE
PLN
PINF
PAS
PUNE
POLICY
PDEM
PDOV
PCI
PGOVSMIGKCRMKWMNPHUMCVISKFRDCA
PBT
PHUMPGOV
PMIL
PNG
PP
PS
PHUH
PECON
POGOV
PY
PHUMPREL
PHUS
PRL
PGOC
PNR
PGGV
PROV
PTERE
PGOF
PHUMBA
PEL
RS
RU
RW
REGION
RP
RICE
ROBERT
RSP
RUPREL
RM
RO
RCMP
RSO
RELATIONS
REACTION
REPORT
RIGHTS
ROOD
RF
RFE
RIGHTSPOLMIL
SP
SA
SY
SF
SYR
SENV
SCUL
SOCI
SNAR
SO
SU
SG
STEINBERG
SHUM
SW
SMIG
SR
SZ
SIPRS
SI
SAARC
SPCE
SARS
SN
SYRIA
SANC
SL
SCRS
SC
SENVKGHG
SAN
SNARCS
SHI
SWE
SNARIZ
SIPDIS
SEN
SNARN
SPCVIS
SEVN
SSA
SH
SOFA
SK
ST
TPHY
TU
TRGY
TI
TX
TS
TW
TC
TFIN
TD
TSPA
TH
TT
TIP
TBIO
TSPL
TZ
TERRORISM
TRSY
TN
THPY
TINT
TF
TL
TV
TK
TO
TP
TURKEY
TNGD
TBID
TAGS
TR
UP
US
UNSC
UK
UZ
UE
UNESCO
UV
UNGA
UN
UNMIK
UNO
UY
UAE
UNEP
UG
UNHCR
UNHRC
USUN
UNAUS
USTR
USNC
USOAS
UNCHR
UNCSD
UNDP
USEU
USPS
UNDC
UNDESCO
UNCHC
UNFICYP
UNC
UNODC
UNPUOS
UNCND
UNICEF
UNCHS
UNVIE
USAID
UNIDROIT
Browse by classification
Community resources
courage is contagious
Viewing cable 10LONDON439, UK DEFENDS OIL EXPLORATION IN FALKLAND ISLANDS
If you are new to these pages, please read an introduction on the structure of a cable as well as how to discuss them with others. See also the FAQs
Understanding cables
Every cable message consists of three parts:
- The top box shows each cables unique reference number, when and by whom it originally was sent, and what its initial classification was.
- The middle box contains the header information that is associated with the cable. It includes information about the receiver(s) as well as a general subject.
- The bottom box presents the body of the cable. The opening can contain a more specific subject, references to other cables (browse by origin to find them) or additional comment. This is followed by the main contents of the cable: a summary, a collection of specific topics and a comment section.
Discussing cables
If you find meaningful or important information in a cable, please link directly to its unique reference number. Linking to a specific paragraph in the body of a cable is also possible by copying the appropriate link (to be found at theparagraph symbol). Please mark messages for social networking services like Twitter with the hash tags #cablegate and a hash containing the reference ID e.g. #10LONDON439.
Reference ID | Created | Released | Classification | Origin |
---|---|---|---|---|
10LONDON439 | 2010-02-24 19:07 | 2010-12-01 21:09 | CONFIDENTIAL//NOFORN | Embassy London |
VZCZCXRO2410
PP RUEHAG RUEHROV RUEHSL RUEHSR
DE RUEHLO #0439/01 0551950
ZNY CCCCC ZZH
P 241950Z FEB 10
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC PRIORITY 5077
INFO RUCNMEM/EU MEMBER STATES COLLECTIVE PRIORITY
RUEHWH/WESTERN HEMISPHERIC AFFAIRS DIPL POSTS PRIORITY
RUEKJCS/SECDEF WASHDC PRIORITY
RHEBAAA/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEHBL/AMCONSUL BELFAST 1526
C O N F I D E N T I A L SECTION 01 OF 03 LONDON 000439
NOFORN
SIPDIS
E.O. 12958: DECL: 02/24/2020
TAGS: EPET ECON ENRG PREL AR UK
SUBJECT: UK DEFENDS OIL EXPLORATION IN FALKLAND ISLANDS
WATERS
LONDON 00000439 001.3 OF 003
Classified By: Economic Minister Counselor Richard Albright for reasons
1.4 b & d
¶1. (SBU) Summary: Tensions between the UK and Argentina
have risen over the past week over a new drilling campaign in
the Falkland Islands Outer Conservation zone following the
arrival of the Ocean Guardian oil rig in the North Falkland
Basin. Argentina contested the right of the Falkland
Island's Government to license drilling for oil off the coast
of the islands, a British Overseas Territory. UK Foreign
Secretary David Miliband firmly defended the oil exploration
as being in accordance with international law. Desire
Petroleum, a UK-headquartered company, started drilling the
first well on February 22 following five years of
preparation, including acquiring production licenses.
Exploration and production licenses are approved by the
Governor of the Falkland Islands, following consultation with
the UK's Foreign Secretary. The new drilling campaign is
expected to last approximately eight months, as at least two
other companies with E&P licenses within the Falklands
Conservation Zone make use of the rig sequentially. Desire
confirmed that Argentina's actions will not disrupt its
activities and said it had worked closely with the UK's
Foreign and Commonwealth Office (FCO) to try to avoid
inflaming tensions. With the exception of the Falklands, HMG
seeks to continue a normal relationship with Argentina. End
summary.
UK Defends Oil Exploration in Falkland Islands
------------------------ ---------------------
¶2. (U) Tensions mounted between the United Kingdom and
Argentina ahead of a drilling operation in the Falkland
Islands conservation zones by a UK company, Desire Petroleum.
Argentina contested the UK's right to drill for oil off the
coast of the Falkland Islands, a British Overseas Territory,
and introduced a requirement that vessels traveling to the
Falklands through Argentine waters obtain permits. Foreign
Secretary David Miliband strongly defended the oil
exploration during a February 18 BBC radio interview, saying
it is being conducted in accordance with international law.
In a statement February 23, Chris Bryant, the UK's Foreign
Office Minister with responsibility for the British Overseas
Territories, reiterated UK support for the oil exploration.
He said the Falkland Islands government is entitled to
develop a hydrocarbon industry within its waters. He said
the UK will continue to support the islands in developing
this "legitimate business in its territory." The Falkland
Islands' Legislative Assembly also asserted its right to
develop a hydrocarbon industry within the Islands' waters in
a February 18 press release.
¶3. (C) Andrew Allen, Head of the Southern Oceans, team in
FCO's Overseas Territories Directorate, told us February 24
that no UK government would negotiate the sovereignty of the
Falklands with Argentina without the approval of the
islanders, who overwhelmingly opposed any such discussions.
He emphasized HMG desire to continue cooperation with
Argentina on all other issues. He said that Argentina
appeared to be taking a similar same stance, noting a GOA
statement that it would proceed in legal, diplomatic ways.
Allen said the Argentine Government had so far applied its
decree requiring permits for shipping between the mainland
and the Falklands only to one ship and that cruise ships were
continuing travel between Argentine ports and the islands.
In any event, he said there was little shipping and air
traffic between the Falklands and Argentina. Allen noted
that the main supply links to the islands were a weekly
flight to Chile and cargo shipping to and from Uruguay and
Brazil. He expressed some concern that these countries could
in the future be tempted to restrict those links out of
solidarity with Argentina.
¶4. (SBU) Desire Petroleum started the new drilling campaign
on February 22. Drilling on the "Liz" well in the North
Falkland Basin is expected to last 30 days. An oil rig
platform, the Ocean Guardian, which is owned by U.S. based
Diamond Drilling, was towed from Scotland and arrived
approximately 62 miles north of the islands in the South
Atlantic on February 19. Desire said the rig is firmly
inside British waters and that Argentine protestations would
not disrupt its activities. (Note: Julia Painting, Head of
the Falkland Islands section within the FCO's Overseas
Territories Directorate, said the Falkland Islands' waters
extend 200 nautical miles off the coast of the islands and
consist of the Falkland Interim Conservation Zone of 100
nautical miles (FICZ) and the Falkland Outer Conservation
LONDON 00000439 002.3 OF 003
Zone of 200 nautical miles (FOCZ). There are several "kinks"
in the conservation zones where they meet the Argentinean
Exclusive Economic Zone. End note.) Another official in the
same office explained to us that the FOCZ is the Falkland's
Exclusive Economic Zone, in all but name. Earlier
governments had decided to use FICZ and FOCZ to avoid
arousing tensions over the term. The official noted that a
drilling rig had operated in the FOCZ in the late 1990s,
provoking no protests from Argentina. According to FCO, this
was a period when then President Menem was seeking
cooperation with the Falklands.
Falkland Islands Oil Licensing System
-------------------------------------
¶5. (SBU) Oil exploration and production within the
Falkland's conservation zones require licenses granted by the
Islands' government. Plans to drill must be approved by the
Governor of the Falkland Islands. The Governor grants
approval having consulted with the UK's Foreign Secretary.
All applications are scrutinized by both the Falkland Islands
and UK authorities. The Falkland Islands' Department of
Mineral Resources advises the Islands' Governor with regard
to local exploration concerns. Officials from the UK's
Department for Energy and Climate Change (DECC) told us DECC
only offers technical advice to the UK's Foreign and
Commonwealth Office (FCO). However, they noted that
decisions regarding the development of the Falkland Islands'
hydrocarbon industry are ultimately a matter for the Falkland
Islands government.
¶6. (U) The licensing system consists of exploration licenses
and production licenses. Exploration licenses allow
companies to gather seismic, gravity, magnetic, geochemical,
and sea-bed data and do not allow drilling deeper than 350
meters below the sea-bed. They are not area-specific and can
apply to all of the designated area ) which covers 400,000
kilometers squared, approximately 50 percent bigger than the
UK's North Sea. Licenses are typically awarded for one year,
but can be renewed for up to three years. Production
licenses are area-specific and provide exclusive rights for
surveying, drilling and production. They are awarded through
occasional competitive rounds or, more typically, under an
open-door system. Bids for open-door production licenses can
be made at any time for any number of whole blocks (12'
longitude by 10' latitude) up to a total of 30 continuous
blocks in any one license. Applicants can determine the size
and shape of the area they bid for and there is no limit to
the number of licenses that can be applied for at any time.
¶7. (U) The Falklands' fiscal system comprises a variable
acreage rental, 9 percent royalty on production, and 26
percent corporation tax on profits. Acreage rentals are
payable annually in advance. Rents vary depending on the
license phase and whether the license was awarded as a result
of a competitive licensing round or as the result of an
open-door invitation. There are no signature bonuses, no
production sharing contracts, no back-rights and no local
market discounts. The Falkland Islands welcome applications
from companies worldwide. However, according to the
Department of Mineral Resources, the Falkland Islands
government is unlikely to grant a license to any applicant in
which Argentine interests hold more than a 49 percent stake.
¶8. (U) Existing production license holders are: Desire
Petroleum, Argos Resources, Falkland Oil and Gas Ltd/BHP
Billiton, Borders and Southern Petroleum, and Rockhopper
Exploration. Previous operators have included Shell, Amerada
Hess, Lasmo and IPC/Lundin Oil. Most of the current license
holders are listed on the London Stock Exchange's Alternative
Investment Market (AIM). All combined, they have raised in
excess of GBP 250 million in recent months to fund drilling
operations.
Desire Petroleum
----------------
¶9. (SBU) Desire Petroleum, which has started the new
drilling campaign, is dedicated to explore for oil and gas in
the North Falkland Basin. It was founded in 1996 and is
listed on the London Stock Exchange's Alternative Investment
Market (AIM). It participated in the first round of drilling
in the North Falkland Basin in 1998 and currently operates
six licenses in the area. It estimates recoverable oil
potential in the region at 3.5 billion barrels, with gas
reserves of over 9 trillion cubic feet. (Note: ExxonMobil
International Chairman Brad Corson told us he does not
LONDON 00000439 003.3 OF 003
believe there is enough oil on the Falkland Islands
Continental Shelf to be profitable, citing Shell's earlier
oil exploration attempts which they abandoned. End note.)
¶10. (SBU) The current drilling campaign is expected to last
approximately eight months, according to Ben Willey, a
spokesman for Desire. Willey told us that if all runs
smoothly, the Ocean Guardian rig will drill between six and
eight wells. The first well, already underway, is for Desire
in the North Falklands Basin. The drilling is expected to
last 30 days. After this, the rig will start on a second
well, also in the North Basin, for Rockhopper Exploration.
The third well will be drilled for the Falkland Oil and
Gas/BHP Billiton joint venture, the fourth for Rockhopper and
the fifth for Desire. Depending on the success of these
wells, Desire may decide to drill up to three additional
wells. Its contract with Diamond Drilling, the rig owner,
allows for up to eight wells.
¶11. (SBU) Willey stressed that Desire worked very closely
with the UK's Foreign and Commonwealth Office (FCO) over the
past five years throughout the planning stages of the
drilling campaign. During the past few weeks, while tensions
with Argentina have mounted, he said Desire has sought
further advice from the FCO and cleared all statements with
the department to ensure the company does not further inflame
the situation. Willey said Desire has also built good
relations with the Falkland Islands government. He confirmed
that the rig passed entirely through international waters on
its journey from Scotland to the North Falkland Basin.
Additional Companies Operating In The Falklands
--------------------- -------------------------
¶12. (U) -- Rockhopper Exploration, also AIM-listed, has
licenses to explore for oil and gas in the North Falkland
Basin. It raised GBP 50 million through an equity placement
in late 2009 to finance its 2010 drilling campaign in the
Falklands.
-- Falkland Oil and Gas, which is also an
AIM-listed UK company, focuses on oil and gas exploration in
the undrilled South and East Falkland Basins. It is involved
in a joint venture with BHP Billiton.
-- BHP Billiton is an Anglo-Australian natural
resources company. It is one of world's largest mining
companies and its products include petroleum, aluminum, iron
ore, diamonds, manganese and coal. BHP Billiton owns a 51
percent stake in its joint venture with Falkland Oil and Gas.
The joint venture was agreed in October 2007.
-- Borders & Southern Petroleum focuses on
emerging hydrocarbon systems. Its first project is based in
an untested basin to the south of the Falkland Islands. The
company was awarded its first exploration license in the
Falkland Islands in 2004 and in 2005 listed on the AIM,
raising GBP 10 million.
-- Argos Resources is a private exploration
company and holds a production license in the North Falkland
Basin.
¶13. (C) Comment: UK government officials have made public
statements asserting the right of the Falkland Islands to
issue exploration and production licenses in its conservation
zones in accordance with international law. However, they
have sought to downplay the row and the impact it could have
on the UK's relationship with Argentina and other Latin
American countries. HMG has attempted to avoid escalating
tensions and has stressed HMG's desire to pursue normal
relations with Argentina in all other matters. FCO hopes
that Argentina will proceed similarly.
Visit London's Classified Website:
http://www.intelink.sgov.gov/wiki/Portal:Unit ed_Kingdom
SUSMAN