Falkland Oil & Gas experiences major losses after being forced to abandon dry well
Shares in FOG (Falkland Oil & Gas companies) have plummeted to less than half their original value after the company was forced to plug a well that they had found contained no oil. Shares initially rose to a high of 244 pence in June as it was hoped that the oil explorer had revealed a new oil field. Shares recently fell to a low of 101.5 pence on Monday, which is an enormous setback for FOG, who had estimated that the Falkland Islands area contained up to three billion barrels of oil reserves.
Yesterday the chief executive of FOG, Tim Bushell tried to de-emphasize the failure by insisting that the company is to continue on its quest to explore new oil reserves in the area. The well was the first to be drilled in the basin and Bushell hopes that further drilling will eventually lead to the discovery of sufficient oil reserves. Rockhopper Exploration, FOG’s rival company experienced booming shares after it discovered oil roughly 220 kilometres to the north of the islands at the beginning of May. Their share values jumped over 150 percent in 24 hours after the first significant oil strike to occur around the Falklands area, which is still being tested for viability.
Meanwhile, as the possibility of large volumes of commercially viable oil in the Falklands attracts attention, it is also possible that disputes over the United Kingdom’s sovereignty in the Falkland Islands may be raised by the Argentine media in the future. Relations between the United Kingdom and Argentina continue to be turbulent due to this ongoing dispute.
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