December 3, 2010 / 12:40 PM / 9 years ago

REFILE-Falklands oil not enough for profit-leaked cable

(Refiles with omitted word ‘not’ in paragraph five)

* Exxon exec says in leaked cable Falkland oil insufficient

* Exxon spokesman declines to comment

* UK firms Desire, Rockhopper say found oil in Falklands

By Alex Lawler

LONDON, Dec 3 (Reuters) - Oil resources in the Falkland Islands, a British territory claimed by Argentina, are insufficient to be profitable, an ExxonMobil Corp (XOM.N) executive said, leaked U.S. documents show.

The cable from the U.S. Embassy in London was dated February 2010 and was about a new oil drilling effort then starting in the Falklands and a resulting rise in tension between Britain and Argentina.

“ExxonMobil International Chairman Brad Corson told us he does not believe there is enough oil on the Falkland Islands Continental Shelf to be profitable, citing Shell’s earlier oil exploration attempts which they abandoned,” the cable read.

Exxon is the world’s largest oil company not owned by a government. The cable was among 250,000 U.S. diplomatic cables obtained by the whistle-blowing website WikiLeaks. For more on the cables see [ID:nWIKI]

Exxon Mobil spokesman Patrick McGinn said the company does not comment on “media reports, speculation or classified documents.”

Drilling resumed in the Falklands, which the UK and Argentina went to war over in 1982, in February after a more than 10-year break. The previous effort in 1998 ended with disappointing results.

After their failure in 1998, big oil companies such as Royal Dutch Shell (RDSa.L) have not headed back.

Firms currently involved in the Falklands are much smaller and only one major international company, Anglo-Australian miner and oil producer BHP Billiton (BHP.AX), is active in the area.

Since drilling began in February, and since Corson was quoted in the cable, companies have reported some success and setbacks in their Falklands efforts.

On Thursday, UK firm Desire Petroleum DES.L said it had made an oil discovery, boosting its shares by as much as 51 percent. [ID:nLDE6B1072] In October, it said it had found no oil or gas in its first well of a four-well programme.

Another UK-listed company, Rockhopper Exploration (RKH.L), said in May it found oil in the North Falkland Basin. In August, it said another well was found to be dry. (Editing by James Jukwey)

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