British oil explorer Rockhopper expects to find a partner to invest in its politically sensitive discovery offshore the Falkland Islands within three months and might sell a majority stake in the $2 billion (1 billion pound) project.

Company executives told an investor conference hosted by Morgan Stanley last week that seven to eight companies were interested in bidding, adding that Rockhopper could give up its lead role in the project.

Rockhopper would be willing to relinquish operatorship, if the farm-down interest was high enough, the investment bank said in a research note.

Rockhopper is giving would-be bidders access to its data, the company executives said at the conference.

Shares in the company jumped by 9.7 percent to their highest level for over six months, trading at 301.75 pence at 0934 GMT.

Analysts from Bank of American Merrill Lynch said Rockhopper was likely to see strong interest in the stake.

The significant exploration upside potential that the acreage still offers could prove a strong 'pull factor' for bidders - particularly those with limited exploration newsflow, they said in a note on Monday.

Last year, Rockhopper unveiled plans for a $2 billion project to transform the remote Falkland Islands into an oil production centre and the firm said in October it had been approached by industry partners looking to co-invest with it on the project.

It said it planned to open an online data room towards the end of 2011 to allow interested parties to prepare a bid, but political concerns linked to a long-running sovereignty dispute surrounding the Falklands could put off some prospective partners, analysts have said.

Argentina claims the British-governed Falklands having fought a war against Britain for control of them in 1982.

Falkland Oil and Gas , another British oil explorer, said on Friday that any company with Argentinian interests would most likely not be able to partner with it.

If an oil company has interests in Argentina, it's pretty obvious they're not going to be able to look at the Falklands without a lot of hassle, FOGL Chief Executive Tim Bushell said in an interview with Reuters.

FOGL is in advanced talks about partnering with North American and European independent oil firms which don't have Argentinian interests to explore for oil in the southern Falklands, Bushell said.

The potential return of US players to the area - Hess exited in 1998 - could significantly reduce the perceived political risk around the islands, said Bank of America Merrill Lynch analysts about Rockhopper, noting that Britain's Cairn Energy , Premier Oil
, and U.S.-based firm Noble Energy are reported to be interested in the assets.

Oriel Securities analysts said they believed significant upside could be generated for Rockhopper through a deal with a partner, but added that it is unlikely that any transaction will be completed by the end of the first quarter.

(Reporting by Tom Bergin and Sarah Young; Editing by Erica Billingham)