London-listed Harbour Energy said Sept. 23 it was pulling out of a project to develop the Sea Lion oil discovery offshore the Falkland Islands, which has been bitterly opposed by Argentina and is thought to hold some 1.7 billion barrels.
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The announcement is a major blow for decade-old plans to establish a significant oil hub in the remote South Atlantic British territory, which was the target of an Argentinian invasion in 1982 and is still claimed by the South American country.
In a results statement, Harbour said: "While the Sea Lion discovery has significant resource potential, development of the project is not deemed a strategic fit for Harbour. Therefore the group has decided to explore the options to exit the project and its other license interests in the Falkland Islands."
Harbour was created in April 2021 out of a merger of private equity-owned Chrysaor with Premier Oil, and derives its majority stake in Sea Lion from the latter company.
The announcement is a major setback for minority partner Rockhopper Exploration, which made the Sea Lion discovery in 2010 amid excitement at several potential Falkland oil projects.
While the proposed first-phase development was to target 250 million barrels, total "in-place" resources in the license area are estimated at 1.7 billion barrels.
Argentina has mounted a sustained campaign against all Falkland Islands oil drilling, including launching a sanctions process against Harbour Energy in July, and has repeatedly tried to block ships thought to be involved in oil activity in the islands.
Work on the phase-one development had been suspended in 2020 following the collapse in oil prices, and Harbour had already said it was reviewing the project following completion of the Chrysaor-Premier merger.