The UK Government said it would support the country’s oil companies operating around the Falkland Islands after Argentina announced it is taking steps to sue five British firms.
Argentina president Cristina Fernandez de Kirchner said the companies were operating ‘in a sovereign area of the Argentine nation and as such fall within its specified laws and rules’
The Argentine foreign ministry on Monday declared “illegal and clandestine” the activities of Desire Petroleum, Falkland Oil and Gas, Rockhopper Exploration, Borders and Southern Petroleum, and Argos Resources on the grounds that they are drilling in Argentine waters.
President Cristina Fernandez de Kirchner said the companies were operating “in a sovereign area of the Argentine nation and as such fall within its specified laws and rules”. The companies “are not authorised by the Argentine government under law 17.319 on hydrocarbons”, she added.
According to the Argentine foreign ministry, her declaration opened the way for the “immediate launch” of criminal proceedings.
However, the UK Government said the moves were the “latest attempts to damage the economic livelihoods” of the islands and said it would work with any company potentially affected to help them deal with the practical implications.
“Hydrocarbon exploration in the Falklands is a legitimate commercial venture,” a Foreign Office spokeswoman said.
“The British government supports the right of the Falkland Islanders to develop their own natural resources for their own economic benefit. This right is an integral part of their right of self-determination.
“We remain clear that domestic Argentine legislation does not apply to the Falkland Islands or South Georgia and the South Sandwich Islands.
“We are studying Argentina’s remarks carefully and will work closely with any company potentially affected to ensure that the practical implications for them are as few as possible.”
Britain has ruled the Falklands since 1833, successfully defending them in the 1982 war with Argentina. The small oil explorers moved into the area two years ago. To date, only Rockhopper has discovered a major field.
The escalation in tensions did not come as a complete surprise. Two months ago, Buenos Aires said it would seek civil and criminal legal action against the companies and the President has recently been stepping up her jingoist attacks over the Falklands.
Buenos Aires has been taking an increasingly combative approach to foreign interests in recent months. Earlier this year, the government seized control of domestic energy company YPF from Spain’s Repsol. It later ordered the Spanish telecoms giant to pay $43m for an interruption of just a few hours in the mobile phone service of its local subsidiary.
There is also speculation the government may default on dollar debt by converting the contracts into pesos.