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Falklands oil discoveries reactivate UK-Argentina territorial dispute

02 April 2015

Three UK oil companies – Premier Oil, Rockhopper Exploration and Falkland Oil & Gas – announced on April 2 that they had found significant quantities of oil and gas in the remote Zebedee field north of the Falkland Islands. The three are also looking to explore the Elaine/Isobel well in the North Falkland Basin. Results of initial tests due to be carried out there will be released at the end of this month.

Stock image
Stock image

Argentina, meanwhile, has said it was looking to renew a 2013 reform of a hydrocarbons law that states penalty fines and lengthy prison sentences can be levied on company executives who lead the search for natural resources without permission from the government.

But the British government has insisted that the companies were acting within their rights.

A Foreign Office spokesman said: “We have always been very clear that this is an unlawful assertion of jurisdiction over the Falklands Islands’ continental shelf, which we reject, and we will raise it will the appropriate authorities.

“We are satisfied that the Islands have the right to develop their hydrocarbons sector as a legitimate commercial venture with international oil and gas companies, and will continue to support them as they move forward. Argentine domestic law does not apply to the Falkland Islands.”

The latest diplomatic clash comes against a background of renewed fears of a fresh Argentine invasion of the islands, 33 years after the Falklands War, in which more than 900 servicemen and three Islanders were killed.

Argentina is negotiating the lease of 12 advanced Sukhoi Su-24 attack aircraft from Russia in exchange for beef and wheat, which is forcing Britain to upgrade its defences on the islands. UK Defence Secretary Michael Fallon said that while any agreement between Russia and Argentina was not yet signed, Britain needed to respond to any potential military threat.

Fallon said the  UK would spend £280 million over the next ten years on renewing and updating communications and missiles systems in the Falklands, an announcement that was met with anger from Argentina’s president, Cristina Fernandez.

She said that the oil companies’ announcement was “almost provocative” and that Britain should focus on fighting poverty instead of increasing the amount spent on defence.

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