OIL firms in the Falklands have shelved plans to drill a second well in the south and east of the region, following the steep drop in oil prices.

The move involves three oil exploration companies, Falkland Oil and Gas (FOGL), Edison International and Noble Energy.

They will continue their operations in other parts of the region, but need “disciplined capital management in the current oil price environment”.

The price of Brent crude has almost halved in the last year.

The announcement also follows Argentina’s ramping up of political pressure on the companies last week.

Shares in FOGL opened 4.3 per cent higher as investors saw the news as positive.