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Gold/Mining/Energy : Lundin Oil (LOILY, LOILB Sweden) -- Ignore unavailable to you. Want to Upgrade?

To: ISPYOIL who wrote (764)	10/9/1998 8:38:00 AM
From: Tomas	Read Replies (3) \| Respond to of 2742

Finding Falklands oil becoming political, economic necessity STANLEY, Falkland Islands [AFX] by RICHARD WRAY Finding oil offshore the Falklands Islandsis becoming a political and economic necessity, according to government officials and oil workers, as the islands' fishing trade declines and the Falklands government looks to contribute towards the cost of defending the area. The push to find oil, which has several global oil companies co-operating and sharing information, is taking place against a background of renewed beligerence from the Argentine authorities who accuse the islanders of unilaterally licensing the most promising offshore area. However, there is a feeling among islanders that if there is oil, it will bring increased autonomy and renewed prsperity. The governor of the Falkands, Richard Ralph, said: ''If there is oil in significant commercial quantities then that will underpin the Falklands for the foreseeable future.'' He pointed out that any revenues from the tranches that are solely the possession of the islands will go directly to the Falklands government. However, he added: ''The islanders feel a political, moral and emotional obligation to the British for rescuing them in 1982. They feel they want to repay that debt.'' In order to realise this dream, he said, the island's government, in agreement with the UK government, will ''contribute'' to the defence costs of keeping British troops on the islands. But he stressed this will be a ''contribution, not a tax from the UK government''. He said that, in early negotiations, ''the British government welcomed the very generous offer of the [Falkland Islands] councillors''. As for the economic need to find oil, the islands' ability to sell licences to fishing companies, predominantly based in the Far East, interested in fishingthe area's abundent stock of squid, gave the region a form of fiscal autonomy a few years ago. Fishing licencing brings in about 20-25 mln stg per year despite recent moves by the Argentines to penalise companies fishing in Falklands water without Argentine permission. However, with the recent economic turmoil in the Far East the fishing firms are having problems coming up with the hard currency to pay for the licences, according to Phyl Rendell, the islands' director of mineral resources. ''We are already beginning to see a dip in that fishing income,'' she said. The principal source of revenue for the islands had traditionally been the wooltrade -- sheep outnumber the 2,200-strong populace even more than they do in NewZealand with each animal having about four acres apiece. However, with the worldwide collapse of the wool trade, the Falklands government has been forced to subsidise farmers. The Falkland Islands government has been squirrelling cash away during the boom fishing years, and has -- according to last published figures -- about 90 mln stg in reserves. However, Rendell said if fishing revenues are on a downwardtrend, the islands will start to eat into those reserves with ''quite sobering'' results by around the financial year 2002/3. The islanders are looking for alternative revenue, but even the most promising -- tourism -- looks unlikely to take up the slack that would be left if the fishing industry collapsed. The government's tourism experts reckon the area can take about 200-300 tourists staying per year. ... ...