A giant oil discovery in the Falkland Islands is even bigger than originally thought, it has emerged.
An independent report into the North Falkland Basin has upgraded estimates of recoverable oil resources from 791m barrels to 917m – twice the annual output of the entire North Sea.
Rockhopper Exploration, the company planning to drill in the field, said it planned to extract 532m barrels, up from a previous estimate of 312m. Most of the remainder could be recovered under further plans.
The government of the Falkland Islands has approved production despite Labour blocking new oil and gas licences shortly after coming into office, risking an embarrassment for Ed Miliband, the Energy Secretary.
The ban does not apply to the territory, which governs itself apart from foreign affairs and defence, which the British Government handles.
The Falklands has declined to sign the Paris Agreement on climate change and islanders are believed to have widely supported exploration plans in a consultation held over the summer.
Rockhopper said: “In November FIG [the Falkland Islands Government] confirmed that, having received a number of comments, no further public consultation was required.”
It said a final decision on going ahead with the project was due next year, with the first oil due to be extracted in late 2027.
Rockhopper, which has a 35pc stake in the development – called Sea Lion – says production could rise to up to 120,000 barrels per day and that it would break even at a crude price of $24 per barrel. The project would cost $4bn (£3bn) in total.
The company has started engineering work on a floating production and storage vessel. Navitas Petroleum, the Israeli oil company, has a 65pc stake in the project.
David Lammy, the Foreign Secretary, has stated that climate action will be “central to all that the Foreign Office does” and the Government has said it would not provide financial support to the Falklands plan. However, it added that exploring natural resources on the Falklands “is a matter for the Falkland Islands government”.
Labour said that issuing new oil and gas licences would “not take a penny off bills” and would worsen climate change but that the industry’s decline would be managed to protect jobs.
The field, 136 miles north of the Islands, could have more than 1.2bn barrels of oil, according to Rockhopper, making it bigger than any left in the North Sea.
The Falklands government said that “given the UK’s robust and continued support to uphold the Falkland Islanders right to determine their own future we would expect this to extend to our freedom to choose whether or not to develop a hydrocarbon industry”.
The Foreign Office and the Department for Energy Security and Net Zero were approached for comment.