April 23, 2012 / 6:50 AM / in 6 years

UPDATE 1-Borders and Southern makes new Falklands discovery

* Finds valuable gas condensate south of disputed islands

* Says likely to contain ‘significant volumes’

LONDON, April 23 (Reuters) - Explorer Borders & Southern said it made a significant discovery of gas condensate off the coast of the Falkland Islands, adding to hopes that the British-governed archipelago will be transformed into a new oil producing region.

The search for oil in waters off the remote islands has angered Argentina, which claims the territory and has sought to disrupt the exploration with legal threats and shipping curbs, in the year which marks the 30th anniversary of a war it fought with Britain over the islands it knows as the Malvinas.

Borders & Southern said on Monday that a well drilled on the Darwin prospect off the south coast of the Falklands found valuable gas condensate, a liquid which often trades at a premium to crude oil.

“It is too early to give an accurate resource estimate, but this large simple structure, with a seismic amplitude anomaly measuring 26 square kilometres, is likely to contain significant volumes,” the company said in a statement.

Oil was found to the north of the Falklands by another British firm, Rockhopper Exploration, two years ago and the company is working to bring in a partner to help develop the find and turn the South Atlantic islands into an oil producer.

A second find in the islands could help make the logistics of developing the fields easier.

The discovery of condensate in the Falklands comes at a time of Argentinean focus on its own oil and gas resources. The country controversially nationalised oil firm YPF earlier this month in a move it hopes will help boost production.

Borders & Southern is leading the charge to find oil off the south coast of the islands, with a second well slated to be drilled on the Stebbing prospect, before the rig goes to drill for Falkland Oil & Gas.

Borders & Southern said in September that the Darwin prospect could contain an estimated recoverable resource of between 300 million to 760 million barrels.

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