There's going to be no oil bonanza here either.

Meanwhile there is silence about the Elgin platform disaster while it is likely that Northern Europe is getting a dose of acid rain.

UK explorers struggle to strike Falklands oil

Argentina's sabre-rattling – coinciding with 30th anniversary of invasion of islands – comes despite lack of success by UK oil exploration companies

the Guardian,

2 April, 2012

Argentina's latest sabre-rattling over oil exploration in the Falklands is puzzling given the latest financial results from the island's key prospectors. Desire Petroleum and Borders & Southern Petroleum, two of five London-listed exploration businesses with interests in the archipelago, announced annual pre-tax losses of $42.5m (£26.5m) and $1.74m on Monday.

Those figures are typical of explorers struggling to strike oil and there are two others in a similar situation. Argos Resources and Falkland Oil and Gas are long on promise but short on producing barrels of the black stuff. Politicians in Buenos Aires, nonetheless, believe they are seeking to profit from territory that is rightfully theirs, no matter how fleeting the prospects of genuine success. The Argentinian government's anger is heightened by the fact that one outfit, Rockhopper Exploration, has discovered significant oil reserves in the Sea Lion field to the north of the islands and has been seeking a partner to invest in the $2bn project.

The most recent in a flurry of aggressive statements from Argentina, seemingly timed to coincide with the 30th anniversary of the country's invasion of the Falklands, emerged this weekend. Argentina's embassy in London has sent a two-page letter to up to 15 banks, thought to include Royal Bank of Scotland and Goldman Sachs, raising the threat of civil and criminal action if they continue working with the five London-listed companies.

Casting a wide net, the diplomats targeted banks that advise the companies as well as City firms that provide stockbroking services or write research notes about the five, a list that includes Panmure Gordon and Oriel Securities.

Wielding a mixture of legal and diplomatic brawn, the letter warned the institutions to "bear in mind … the sovereignty dispute and … the consequences of any unlawful hydrocarbon exploration activities in the Argentine continenal shelf in proximity to the Malvinas [Falkland] islands".

The letter added: "It should also be borne in mind that … participation in those activities will cause companies directly or indirectly involved in them to be subject to such administrative, civil and criminal actions as may be provided for in the Argentine laws governing such activities."

The five explorers declined to comment, with one industry source admitting that none of them wants to be "dragged into the political realm".

However, while there is confidence that the Argentinian government's legal threats will not damage the five players, another industry source said an attempt at co-operation between the UK and Argentina would at least remove the distraction of a prolonged territorial tussle and the knock-on effect on exploration.

"The industry would probably like it if people sat down and discussed a zone of co-operation where efforts are shared, such as between Australia and Timor where spoils are shared," said the source.

Such an arrangement has the potential to compensate Argentina if a deal on sovereignty remains out of the question. According to Edison Investment Research, reportedly a recipient of the embassy letter, the islands could generate $180bn (£115bn) in royalties and tax from oil.

Rockhopper Exploration

Estimates of the amount of oil around the Falklands range from 8.3bn barrels to 60bn, but Aim-listed Rockhopper is the only business to have come close to realising that promise. It has found recoverable reserves of between 400m and 500m barrels of oil at its Sea Lion field in the north Falklands basin and said this year that eight companies are interested in a joint venture on the project. The announcement has stoked takeover speculation around the company, which hopes to start producing oil in 2016. Analysts have said that a "farm-out", where a partner is delegated extraction duties, is the most likely outcome.

Desire Petroleum

Desire endured a dire end to 2010 when it reported that two promising wells were dry. The run on its shares occurred after Desire was forced to backtrack on "highly encouraging" results of initial drilling that turned out to be the opposite. It has farmed out a well to Rockhopper, close to the Sea Lion field, which has led to a discovery of oil and gas. Despite that success, it is not drilling at present.

Argos Resources

Another company that has struggled to find oil but is optimistic after recently completing a 3D survey of its field near Sea Lion, a patch of territory that covers more than 1,100 sq km in the north Falklands basin. Echoing some of its peers in the area, its corporate statements are studded with hopeful statements such as "excellent new data" and "highly encouraging" survey results. According to one estimate, there could be 2.1bn barrels of oil in its fields. But, as yet, they have been elusive.

Borders & Southern Petroleum

The company has two exploratory wells in 2km and 1.7km of water in the south Falkland basin. The promising fields are called Darwin and Stebbing – a crew member on the HMS Beagle that carried Charles Darwin on his ground-breaking voyage. Borders & Southern was founded by Harry Dobson, a mining entrepreneur who once held a 6.7% stake in Manchester United and made £30m from his investment. He is still awaiting a successful outcome from his latest business foray.

Falkland Oil and Gas

The biggest potential player on the archipelago, Falkland Oil and Gas has the highest number of production licences in the region. Its sites to the south and east of the Falklands have significant potential, with the Loligo field harbouring an estimated 4.7bn barrels. But the company must wait until Borders & Southern finishes with its exploratory rig before it can start work. Sharing a rig makes sense, according to industry sources, because exploration is such a costly business. This is particularly when there is a chance that the wells may come up empty – a fate that cost Desire's shareholders millions of pounds. It can cost $1m a day to run an exploratory well in deep water.