There is a faint whiff of excitement about the prospects of finding oil near to the Falkland Islands. There may be a significant find, the real problem is how do we define significant. Oil exploration is not cheap, the oil rig that's being used costs some $245,000 per day. It will drill wells in at least four of the offshore exploration areas which are known in the oil business as "prospects".
Back in 1998 six test wells were drilled, which targeted a layer of sandstone - but not enough oil was found and the low price meant further exploration was abandoned. Now that the price of oil (even with the occasional dip) has risen, there is more potential profit to be made by drilling deeper, into untested sandstone into the sides of North Falkland basin.
Buoyed up by the prospect of much higher profits and the geologists who say there is a 17% chance of finding an oil reserve of about 391m barrels, not to mention the nine trillion cubic feet of natural gas. Such a find, even working on the fact that we might get 40% of it out with current technology, sounds a lot, until you realise that it would feed the world's economy, even in a period of recession for some 4 days...
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