![COLUMN | Stop in the name of the law! Argentina and the Falklands; Navitas and the Sea Lion project; Bluewater’s Aoka Mizu and OGX-1 [Offshore Accounts]](http://media.assettype.com/bairdmaritime%2F2026-09-28%2Fsnyquqdt%2FUntitled-May-13-2026-at-09.00.32.jpeg?w=480&auto=format%2Ccompress&fit=max)
Last week, we looked at the transformation of Oslo-listed 2020 Bulkers into a new entity called AHTS AS through the acquisition of 15 moderately large anchor handlers for US$405 million from a consortium of extremely rich Norwegians, who flipped them into the company for a 15 per cent premium in two months. The company moved ahead with its audacious plan by successfully completing a private placement last Thursday, selling new shares worth US$175 million last week at a share price of US$0.299 per share. That’s in addition to the new shares it will issue to the sellers of the ships in part payment for the vessels.
This week, we look at one of the projects where AHTS AS is bidding to deploy its vessels: the Falkland Islands, proudly British since 1833, although the previous decades had seen settlements by the British, the Spanish and the French, plus American involvement (excellent Wiki history here). For most of the subsequent years, the Falklands was a sparsely populated backwater where men were men and sheep, the dominant livestock, were scared.
That changed in 1982, when Argentina invaded both the Falkland Islands and the neighbouring British-ruled island of South Georgia as a desperate distraction from the country’s economic problems (Argentina’s, not Britain’s).
In a 73-day military campaign, Britain quickly took back the islands, sinking an Argentine Navy cruiser in the process, and so over-stimulating former Prince Andrew Windsor in his helicopter that he never sweated again (he claimed).
The ignominious defeat led to the end of military rule in Argentina and the restoration of democracy. The military regime of General Leopoldo Galtieri and his predecessors from the 1976 coup in Buenos Aires was then found to have murdered between 13,000 and 30,000 of its own citizens and to have tortured thousands more, dropping both the living and the dead from helicopters into the Atlantic Ocean.
Subsequently, in 1986, Argentina convicted Galtieri of mismanaging the war, but not of being responsible for any killings or human rights abuses (perhaps Pete Hegseth might take note; losing a war is worse than killing innocents). He was then pardoned in 1989 as the country plunged into hyperinflation.
Argentina then had a series of currency and financial crises from 2001 onwards, defaulted on its debt (again), elected first Nestor Kirchner and then his crooked widow Cristina Fernandez de Kirchner to the run the country, defaulted on its debt (again, this time twice), had over 200 per cent inflation (again), and in 2023 the chainsaw wielding, right-wing populist and possessor of the world’s largest sideburns, Javier Milei, was elevated as President.
Facing economic problems (again), Mr Milei has now turned to an age-old solution to political problems in Latin America: blame the gringos and escalate a military crisis, a tactic right out of general Galtieri’s unsuccessful 1982 playbook.
The Sea Lion oil field off the Falkland Isles now finds itself in Mr Milei's crosshairs.
Last week in the United Nations General Assembly in New York, President Milei demanded that the international body compel Britain to hand over the islands to Argentina. This is despite the fact that in the most recent vote on sovereignty, when the inhabitants of the Falklands were asked in 2013, “Do you wish the Falkland Islands to retain their current political status as an Overseas Territory of the United Kingdom?” 99.8 per cent of them said they did and wanted to remain British, with only three people saying they wished for the status of the islands to change. Two more spoiled their ballot papers.
Now President Milei has also implemented new measures to halt the development of the Sea Lion oil field in Falklands waters. He introduced a sweeping security bill that would toughen sanctions on companies working in the Sea Lion project without Argentine authorisation (hint: such authorisation would not be forthcoming so long as the islands are under British rule). He created a national security council chaired by himself, and he signed an order to expand the military’s role in protecting critical Argentinian infrastructure.
Two weeks ago, an Argentine federal judge issued an injunction to stop Navitas Petroleum, as the operator of the Sea Lion field and 65 per cent shareholder in the project, and its partner Rockhopper Exploration with 35 per cent, from developing the 313 million barrels of proven and probable oil reserves in harsh environment field off Argentina’s southern coast.
The judicial order was seen by the Associated Press and it bars drilling, offshore installations, and port construction until Argentine authorities can conduct an environmental review and issue a decision. The Argentinian Government has threatened sanctions on any country that invests in Navitas or Rockhopper or that works on the field development.
Whilst claiming to be a staunch supporter of Israel, Milei appears not to have noticed the contradiction that Navitas is Israeli-owned and is listed on the Tel Aviv Stock Exchange.
Argentina already has a law dating to 2011 (Law 26.659) that forbade companies working in the Falklands from operating in the country for between five and 20 years. This followed the discovery of Sea Lion in 2010 in 450 metres of water, and Argentina convinced its neighbours to forbid their ports being used to support the drilling.
The new decree issued by President Milei has added shareholders, directors, and suppliers of companies working on Sea Lion to those impacted by the sanctions. So far, it includes 45 companies and people. It also barred violators from a tax scheme for big investors in the country, as per the Rio Times.
Of course, the Argentinian decree and the court injunction are completely meaningless at stopping the Sea Lion project. They have no force in the UK, Israel, or the Falkland Islands.
However, it forces companies to choose whether they want to work in Argentina or in the Falklands. You can’t do both now.
Argentina has only small offshore fields in the far south of the country in shallow waters, and the country's first ultra-deepwater exploration well, Argerich-1, was declared dry in 2024. Drilled by Norway's Equinor at the CAN-100 block in the Argentina Norte basin, approximately 300 kilometres off the coast of Buenos Aires province, the Argerich-1 well did not yield the anticipated hydrocarbons, and there has been no follow-on drilling.
Argentina is a major producer onshore. Oil and gas production has been one of the few successful sectors of the country's moribund economy under President Milei. Argentina's oil production hit a record 902,920 barrels per day (bpd) in July this year, the most recent month for which data is available, up 12 per cent year over year. Shale oil in the Vaca Muerta formation in the far south of the country drove the increased output.
Oilprice noted that Chevron, onshore US player Continental Resources, and right-wing German-American billionaire Peter Thiel are among those investing billions into Vaca Muerta. In fact, Mr Thiel, the founder of Paypal and major donor to Vice President J. D. Vance’s senate campaign, so loves Argentina that he and his husband have moved there with their kids and he took a one per cent shareholding in local shale producer Vista Energy.
Oil is now officially Argentina's second-largest export after soybeans. Peter Thiel is not the first German to have found sanctuary in Argentina.
Golar has already signed a large floating LNG (FLNG) project in Argentina for the export of shale gas from Vaca Muerta for a consortium of energy companies including Pan American, state-owned YPF, and Harbour Energy. The Norwegian LNG player secured ~US$14 billion of revenue from two 20-year FLNG contracts. The first FLNG, Hilli, will go on-hire in Patagonia in 2027, and the second unit will follow in 2028.
Here’s hoping that Golar has better luck than Belgium’s Exmar, which had signed a 10-year contract for its Tango FLNG unit to export Vaca Muerta gas, only for YPF to cancel it in 2020, resulting in a successful US$150 cancellation claim from Exmar.
The major oil field services companies, Baker Hughes, Halliburton and SLB (former Schlumberger), all say that they will not work in the Falklands. Clearly their involvement in the 900,000 barrels of Argentinian onshore production from thousands of wells and dozens of drilling rigs, fracking units, and workover spreads outstrips the attraction of a single semi-sub working on a relatively small field in the South Atlantic.
First oil from Sea Lion is expected in March 2028, and development drilling is scheduled to begin next year, kicking off a 23-well programme that will be tied back to the sole production facility.
Navitas has tendered for both large anchor handlers and high-capacity platform supply vessels to support the drilling, but it is not clear which rig or boats have been selected, although many of the ships owned by AHTS AS are believed to be on the shortlist. DOF cannot tender to Navitas following the sanctions law, as the Norwegian owner operates the 2000-built subsea vessel Skandi Patagonia subsea vessel for TotalEnergies in Argentina and would lose this contract if it sent vessels to support Sea Lion.
What is known is that the floating production storage and offloading (FPSO) Aoka Mizu, owned by Dutch contractor Bluewater, has been leased for 12 years firm plus eight yearly options for production on Sea Lion. The FPSO arrived in Singapore 11 days ago to enter Seatrium’s shipyard (the former Keppel Shipyard) for upgrades, life extension, and the installation of a new mooring system for Sea Lion.
Navitas has forecast production of 55,000 bpd of oil from Aoka Mizu in the Northern Development Area (NDA) of Sea Lion. The project is estimated to cost US$1.8 billion, which is now fully funded.
However, the company is keen to boost Sea Lion’s output even further and has bought a second FPSO itself, ahead of a final investment decision on the neighbouring Central Development Area (CDA), the second phase of Sea Lion, after Aoka Mizu brings the NDA wells onstream.
Readers with long memories may remember the complete fiasco of the Brazilian independent producer OGX, which went spectacularly bankrupt in 2013 with debts of US$5 billion after it singularly failed to produce more than a trickle of oil, disgracing (now former billionaire) owner Eike Batista, destroying his intertwined business empire and embarrassing its lenders.
One of the casualties of that corporate calamity was the FPSO OSX-1, which was deployed on the Tubarao Azul field from 2013 to 2015, and then laid up in Norway. Last month, Navitas announced that it was buying the barely-used vessel from cold stack in the fjord for the second phase of the Sea Lion project. Navitas paid around US$125 million for the ship, and the company anticipates spending another US$65 million on repairs, maintenance and engineering costs before any upgrade costs for the field.
Navitas will initially be the sole owner of the FPSO, although it is in discussions with its Sea Lion partner Rockhopper on how the asset will be deployed at the field and how Rockhopper will fund its share of the ship. Likely, Rockhopper will sell extra stock in a right issue to fund its share of the purchase. Rockhopper had a market capitalisation of just over US$900 million last Friday.
OSX-1 is designed to boost production by 125,000 bpd and help accelerate phase two of Sea Lion. Buying the vessel ahead of the final investment decision is a remarkable vote of confidence in Sea Lion. The second phase of Sea Lion's development, bringing the CDA into production, will involve drilling 20 production wells (likely kicking off in 2029), and Sea Lion’s ultimate plans for CDA call for an extra 18 subsea wells on top of that.
Writing in Upstream, Iain Esau stated that, “Navitas aims to submit the CDA development plan to the Falkland Islands Government for approval, targeting a final investment decision in the first half of 2028 and first oil by the end of 2030.”
Having paid to mobilise the rig to come to the South Atlantic and overcome the vitriol of President Milei, Navitas is also considering plans to drill additional exploration wells in 2028 off the Falklands, after the rig finishes the NDA development drilling campaign.
If there are further Falkland finds, companies that have bet on Argentina may regret their choice. In 2021, we genuinely believed that Sea Lion would become a stranded asset. Five years on, it could be the first step in a major new frontier oil production area.
How much has the world changed in that period? How much more will change again in the next five?
Background reading
Russell Searancke has a rare and insightful interview with Hugo Heerema, the founder and owner of Bluewater, the owner of the Sea Lion FPSO, in Upstream here.
Our past coverage of Sea Lion is here.
Argentina’s Foreign Minister Pablo Quirno said on September 4, 2026, that Argentina is “bicontinental, bioceanic,” and we previously observed here that the country’s oil and gas policies were bi-polar.
Valdemar Medeiros has an excellent summary of the rise and fall of OGX here.
The Economist is usually badly written and uninformative, but its 1843 magazine has the most amazing piece of investigative journalism by Alexander Clapp on how a murderous and chubby Dutch drug baron named Jos Leijdekkers has turned Sierra Leone into a cocaine-trafficking paradise, getting the President’s daughter pregnant, and running a fleet of submarines and smuggling vessels from the impoverished African state. If you only read one piece on West Africa corruption, organised crime and institutional failure this month, read, “He was one of the world’s most wanted men. So, he bought a west African country.”
