Britain’s Falkland Oil & Gas said Italian utility Edison was its new partner, bringing in a large, non-British company to help it look for oil in the UK-governed Falkland Islands, where exploration has angered Argentina.
Verbal sparring over the sovereignty of the islands, which are claimed by Argentina, has gathered pace since oil was discovered in Falkland waters in 2010, creating political tension which analysts said could deter big oil firms from investing there.
FOGL on Tuesday named Edison, which is owned by French group EDF, as the unnamed company which it said in March had bought an option to invest in its licence areas off the coast of the remote Falkland Islands in the South Atlantic.
The British company said Edison would pay around $50 million for costs already encountered in earlier exploration work and 2012 drilling costs for a 25 percent interest in its northern licences and a 12.5 percent in its southern licences.
Edison would also make a separate cash contribution of $40 million to FOGL, the company said.
“Overall this looks like an attractive deal for FOGL and highlights that the acreage is attracting interest from larger industry participants,” Oriel Securities analyst Nick Copeman said.
