Hydrocarbons reserves off the coast of the Falkland Islands could match the extraordinary oil and gas wealth recently uncovered in the pre-salt region offshore Brazil, according to Ian McLelland, an analyst at corporate services group Edison Investment Research.
"We don't know yet, but there is the potential for it to become every bit as significant as the discoveries being made offshore Brazil, and other groundbreaking frontier exploration plays around the world," McLelland told BNamericas.
"This is unsubstantiated, but there has been consistent mention over recent years in press reports of there being potentially up to 60Bboe. There's no seismic to back this up, but as you well know when you actually go in to develop an oil and gas industry you start off at the beginning, and it expands from there."
Recent deepwater finds in Brazil's Campos and Santos basins are likely to turn the country into one of the world's top oil exporters over the next decade.
Estimates suggest that between 50B-100Bboe could be located in the lucrative pre-salt offshore fields being developed by state oil company Petrobras (NYSE: PBR) in conjunction with a host of international oil majors.
With the help of the pre-salt, Brazil aims to almost triple oil production over the next decade, and hit 6Mb/d by 2020.
In the Falklands, so far only the Sea Lion field on the PL032 license in the northern basin has been declared commercially viable, with operator Rockhopper (AIM: RKH) estimating recoverable reserves in the region of 450Mboe.
Analysts point out that prospects with significant potential remain to be drilled.
Over the next six months, UK companies Borders and Southern (AIM: BOR) and Falklands Oil and Gas (AIM: FOGL) will target three prospects with a combined estimated reserve potential of 6.7Bboe. The firms also suggest that several other large prospects located on nearby licenses could be uncovered in the future.
Oil production in the Falklands remains a mid-term objective, with the UK's Rockhopper outlining plans last year to begin output from Sea Lion by 2016, through an investment of US$2bn.
In a recently published report, Edison estimates that oil production could bring around US$180bn in royalties and taxes to the Falklands government.