Rockhopper Exploration has insisted plans to develop the Sea Lion oil field off the Falkland Islands are on track despite threats from Argentina.

The British firm, named after the region’s penguins, owns 35 per cent of the field, with an Israeli partner owning 65 per cent.

It comes after Argentina threatened to impose sanctions on companies drilling off the Falkland Islands. President Javier Milei said the Sea Lion oilfield represented a ‘clear and present danger’.

‘If we do not act swiftly, in a few months they will have the material capacity to access the oil that lies underneath our sea,’ Milei said.

And this week he said that if the UK does not ‘halt the illegitimate exploitation’ in two weeks, Argentina would approach the International Tribunal for the Law of the Sea.

But Rockhopper said on Wednesday that it expects oil production to begin in the first quarter of 2028, following the start of development drilling in early 2027.

The first phase of the development is expected to cost about £1.6 billion.

Rockhopper chief executive Samuel Moody said it had been a ‘landmark period’ and there had been ‘a significant increase in the independent valuation of our interest in Sea Lion.’

Moody added: ‘Together with our recent capital raise, which leaves us fully funded to first oil, and the continued strong support of the UK and Falkland Islands Governments, we enter the second half of the year well positioned to deliver significant value to all stakeholders.’

The Sea Lion owners have previously insisted that sabre-rattling by Milei would have no ‘material effect’ on their plans.

It is estimated that the potential oil reserves are around 314 million barrels of oil, according to a report by petroleum consultants Netherland, Sewell & Associates.

But shares in Rockhopper were still down 8 per cent to 59.20pence on Wednesday afternoon. They have dropped by around a quarter over the past six months.