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UPDATE 1-FOGL makes Falklands gas discovery
September 17, 2012 / 7:08 AM / 5 years ago

UPDATE 1-FOGL makes Falklands gas discovery

LONDON, Sept 17 (Reuters) - Oil explorer Falkland Oil and Gas (FOGL) said it found gas off the coast of the British-governed Falkland Islands in the South Atlantic, but it could not yet be sure whether the discovery was commercial or not.

Finding gas in a remote location like the Falkland Islands, an archipelago over which Argentina lays claim, is less straightforward than finding oil as it is more difficult and costly to build the facilities to extract and transport gas.

FOGL, which is partnered with U.S. firm Noble Energy and Italian utility Edison on the project, said on Monday the results were “encouraging” but added that more tests would need to be done to assess the size of the resource and commercial viability of the gas.

Shares in FOGL traded down 10 percent to 62 pence at 0708 GMT.

Companies involved in looking for oil in the Falklands have ignored legal threats by Argentina, which 30 years ago fought a war against Britain over the Falklands and has tried to disrupt exploration there.

Oil was found to the north of the Falklands in 2010 and plans are afoot to turn the province into an oil producer.

FOGL operates to the south of the islands and will drill one more well in the area before the rig goes elsewhere. Borders & Southern, another British explorer, found gas condensate off the south of the islands earlier this year.

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