Rockhopper’s Falklands investment plan

The emergence of the British-governed territory as an oil producer will likely stoke tensions with Argentina, which 30 years ago fought a war against Britain for control of the islands over which it still claims sovereignty.

Rockhopper said yesterday it expected to start pumping oil in 2016 from the Sea Lion discovery made in 2010 and production would ramp up to a maximum of around 120,000 barrels of oil per day by 2018.

Following the initial find made by the company in 2010, analysts questioned whether there was sufficient viable oil to justify investment in infrastructure in the South Atlantic.

Argentina said last year boats sailing from its ports to the Falklands would need a government permit, potentially complicating the prospects for development. Friction resurfaced in June when Britain refused to hold talks over the islands.

Rockhopper said its reserves, which it estimated at around 350 million barrels of recoverable oil, were large enough for a development, having spent recent months drilling a series of appraisal wells to establish the size of the oil field.

The company has not yet said how it plans to fund the project.