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http://www.telegraph.co.uk/finance/newsbysector/energy/oilandgas/9076530/Falklands-oilfields-could-yield-176bn-tax-windfall.html
A report predicts the potential tax riches for Falklands Islands oilfields are likely to reach just shy of $180bn.
By Nathalie Thomas9:30PM GMT 11 Feb 2012
A study to be handed to the UK Government this week will lay bare the potential riches on offer from drilling in waters within the 200-mile exclusion zone set up during the 1980s Falklands War to mark the boundaries of British territory.
A group of UK-listed companies is involved in exploring four major prospects this year, with the largest, Loligo, potentially holding more than 4.7bn barrels of oil. By comparison Catcher, the biggest discovery in the North Sea of the past 11 years, is believed to hold only 300m barrels.
The report by oil and gas analysts at Edison Investment Research predicts that if all four prospects were drilled, the potential tax riches are likely to reach just shy of $180bn.
At present, the Falklands’ main industry is fishing, which generates just $23m a year. Beyond that, the territory receives only $16m in tax receipts a year from other business sectors.
The most developed prospect, Sea Lion, already appraised by Salisbury-based Rockhopper Exploration, is forecast to produce 448m barrels over the next 20 years.
Ian McLelland, co-author of the report, said the opportunity offered by the seas around the islands is colossal: “With current tax and fishing incomes in the region of $40m , the islands look set to be transformed by the oil industry.”
But he cautioned that the recent political posturing by Argentina could prove a major barrier to securing the vital investment needed to get the prospects to where they are actually producing oil.
“The proverbial spanner in the works that remains is the ongoing political dispute between Britain and Argentina regarding sovereignty of the Falklands,” he said.
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