Rockhopper Exploration Falkland Islands problems

The company Rockhopper Exploration is involved in the discovery of oil in the region of the Falkland Islands, which is obviously a politically sensitive task. The project is worth $2 billion and the company is currently seeking a partner to work with on the exploration. According to Morgan Stanley, the investment bank, there are currently around eight companies interested in bidding on the project.

Morgan Stanley recently stated, “If interest is high enough in this project then the company would be willing to give operational control to the new partner.” The company said that they are giving access to the company’s figures to potential bidders as they require additional expertise and money in order to develop the project further.

An oil analyst forMacquarie, an investment bank, is Mark Wilson who has stated, “We expect that Rockhopper Exploration is going to want to sell a half stake in the project  in return for the partner bearing all the costs of development.”

The financial consequence of joining this venture means that only well funded companies are going to be able to afford to step in. The announcement that the company was seeking a partner caused shares to rise 10 percent which leaves them at their highest point in the last half year.

Plans for the development of theFalkland Islandsfor oil production were announced by the company last year and the company said they’ve already been approached by several people looking to join in with the project.

It was initially thought that there would be a joint venture between Rockhopper and Cairne, an Edinburgh-based exploration company, but this company recently returned a large amount of money to its shareholders. This has led analysts to believe that it is going to be using its remaining cash for investment in other areas.