Argentina steps up row over Falklands oil exploration

Britain says drilling for hydrocarbons will go ahead despite Argentine moves to require permits

Britain and the Falkland Islands today brushed off Argentinian moves to impede oil and gas exploration in British-controlled waters in the south Atlantic, saying there was no threat to shipping.

The Foreign Office and Falkland authorities said drilling for hydrocarbon deposits would go ahead without disruption despite an Argentinian effort to control traffic between its ports and the islands.

The rebuff came as critics in Buenos Aires accused Argentina's government of playing the nationalist card to distract from mounting domestic woes.

Yesterday President Cristina Kirchner issued a decree obliging all vessels using Argentinian ports to seek a permit if they enter or leave British-controlled waters, escalating a diplomatic row with London over a prospective "black gold" bonanza.

Argentina lost a brief 1982 war over the archipelago, which it calls the Malvinas, but still claims sovereignty and describes the British presence as an occupation.

Phyl Rendell, the Falklands' director of mineral resources, shrugged off talk of a blockade. "There are very few implications for the Falklands regarding the presidential decree because there are no direct shipping links with Argentina anyway. All oil exploration supplies are being shipped out from Aberdeen. I do not see how the situation can escalate."

The Foreign Office also played down the possibility of conflict and said it wanted to co-operate with Buenos Aires over south Atlantic issues. "Regulations governing Argentine territorial waters are a matter for the Argentine authorities. This does not affect Falkland Islands territorial waters, which are controlled by the island authorities."

Argentina's decree, announced with some fanfare at a press conference, will in theory force all ships bound for the islands or travelling through waters claimed by Argentina to secure the new permit. The decree did not specify, and officials did not elaborate, what sanctions Argentina may levy on ships which do not comply.

Kirchner urged the UN to broker talks over the archipelago's sovereignty and accused Britain of dodging negotiations. The president defended the decree, saying: "I am telling all Argentines that we will keep working for our rights in Malvinas."

Argentinians consider sovereignty over the islands, which Britain occupied in 1833, a matter of national pride. The prospect of missing an oil bonanza has salted wounds from the 1982 conflict, which cost 649 Argentinian and 258 British lives.

A rig, the Ocean Guardian, is expected to arrive this week to start drilling 100 miles offshore. Geological surveys suggest up to 60bn barrels may lie beneath the seabed. Earlier this month Argentina lodged a formal diplomatic protest and last week it prevented a cargo ship from sailing on suspicion it was carrying oil drilling equipment to the islands.

Critics accused Kirchner, whose ratings have plunged over inflation, corruption and battles with farmers, of seeking a distraction. The government must not try to hide "serious internal problems", the newspaper Clarin said in an editorial.

Oil analysts said Argentina's actions would raise the cost of exploration in Argentinian as well as Falkland waters. No commercial deposits have yet been found. A British company, Desire Petroleum, has hired the Ocean Guardian rig to drill in the North Falkland basin and will later lease it to two other British companies, Rockhopper and Falklands Oil and Gas, and an Australian one, BHP Billiton.


Rory Carroll

The GuardianTramp

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