Argentine and British government representatives met in Buenos Aires at midmonth for 2 days of talks on developing any Falklands Islands oil reserves that might show up.
Last month the Falkland Islands government received a report by Environmental Resources Management (ERM), London, setting out development scenarios.
The report suggests the two governments have much to argue about. Early analysis of two recent seismic surveys is "...very encouraging and consistent with oil reserves of up to 50% larger than those in the North Sea."
The Falklands' government hopes Britain and Argentina settle their differences. Licensing rules are being drawn up and are slated for consideration by the U.K. government in preparation for license awards in 1995.
A number of companies are said to have shown an informal interest in applying for licenses, although only two have so far placed orders for data.
One application came from a small U.S. company set up to bid on another company's behalf. The mysterious bidder is thought to be Yacimientos Petroliferos Fiscales (YPF), Argentina's recently privatized state oil firm.
YPF BARRIER
In attempting to operate in the Falklands, YPF would face great problems arising from the war for the islands in 1982 between Argentina and the U.K.
"There is nothing to prevent Argentine companies from buying Falkland Islands' seismic data," said Anton Livermore, deputy representative for the Falkland Islands government, assigned to London.
"Argentine companies cannot become involved in licenses in their own right, though. Their representatives cannot even visit the islands because Argentine citizens are not allowed in."
However, Livermore said theoretically there would be no barrier to an Argentine oil company entering Falklands development projects with another company.
If Argentina dropped its territorial claims, he added, the government would be willing to let in Argentine companies on a commercial basis.
DEVELOPMENT FACTORS
The islands' isolation, sparse population, and limited manufacturing base would influence development methods. Platform construction most likely would take place on the South American mainland, said ERM, with structures towed out about 650 km to the Falklands.
ERM envisages development of any Falkland Islands oil fields be, fixed production platforms, initially with export via offshore loading, and perhaps a pipeline to the South American mainland later.
Argentina's involvement could be vital because it has 12 refineries on its coastline, as well as export terminals at Puerto Rosales, Comodoro Rivadavia, and Punta Loyola. A new 400 km long pipeline from Argentina to Chile would give Argentina access to an export Market on South America's Pacific Coast.
If Argentina and Britain can find a formula and further seismic work is promising, the Falklands' population could double.
The islands' total labor force is estimated at 1,300 people, with fishing dominating the economy.
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