ARGENTINA IS to start drilling for oil around the Falkland Islands as tensions with Britain rise over control of the disputed archipelago’s potential energy reserves.
The decision follows the announcement by a British oil exploration company earlier this month that a test well it drilled in the islands’ waters showed traces of oil. An oil race in the region raises the prospect of a new stand-off between both sides who fought a brief but bloody war over control of the disputed territory in 1982.
The government in Buenos Aires has been made furious by the presence of the British oil exploration companies in the islands’ waters, which it claims are illegally occupied. In February, it imposed restrictions on all shipping using its ports on the way to and from the islands in an effort to disrupt the logistics of the drillers, which are operating in the remote south Atlantic, almost 500km off Argentina’s Patagonian coast.
Now, following the May 6th announcement by UK oil independent Rockhopper that its test well showed indications of oil, Argentina says it too will drill.
“Before the end of the year Argentine companies will start drilling a well,” Argentine energy secretary Daniel Cameron told a congressional committee in Buenos Aires last week. It was not immediately clear if the drilling would take place in contested waters or Argentine waters surrounding the zone claimed and controlled by Britain. Argentina claims the entire region.
Argentina’s decision to drill follows a call by its president, Cristina Kirchner, to halt all exploration activity in the region and for the two governments to start talks. But her proposal, made at the EU-Latin America summit in Madrid earlier this month, was immediately rejected by London.
“The principle of self determination as set out in the UN charter applies. There cannot be negotiation on sovereignty unless and until the Falkland Islanders so wish,” said Jeremy Browne, the new UK minister with responsibility for Latin America.
The islands’ 3,000 inhabitants overwhelmingly desire to remain British and have rejected all previous overtures from Buenos Aires. In the last decade, the Argentine government has replaced its postwar policy of trying to court them to one of seeking to sideline them and reduce discussions over the archipelago’s future to a bilateral matter with London. But the British government insists there can be no talks on the islands’ status until the islanders themselves are willing to consider a change of status.
The dispute has rumbled on since the end of the 1982 conflict in which over 900 people died. But tensions have risen again in recent months after oil companies moved in. A British Geological Society report indicated that the waters around the Falklands could hold up to 60 billion barrels of oil, which would make it a find to place alongside the declining North Sea oil fields.
But industry estimates are far more conservative. The four oil companies with exploration licences from the Falklands government hold out the prospect of 17 billion barrels, still enough to make it one of the biggest finds anywhere in recent decades. But the initial plan is to prospect in two areas for 2.6 billion and 3.8 billion barrels.
Argentina has broad support in South America for its position that the islands, which it calls Las Malvinas, were taken from it by force in 1833 and should be returned. A recent regional summit also backed its description of the presence of British exploration companies off the islands as “illegal”, raising the prospect that all South American ports could be closed to ships supporting the drilling, thus vastly raising its cost.
The announcement by Rockhopper renewed hopes of Falkland residents they could be sitting on a huge bonanza. These had been set back in March when another explorer, Desire Petroleum, said its test well showed “poor results”.
Several wells drilled in the 1990s found oil and gas but, with the price of a barrel then about $10, were not considered viable.