THE IMMINENT arrival of an oil rig to start prospecting off the Falkland Islands has led to a new outburst of tensions between Britain and Argentina in their dispute over the islands’ sovereignty.
The possibility that the islands sit on large oil reserves has given new focus to a dispute that has rumbled on in diplomatic obscurity for decades. In response to the approach of the Ocean Guardian rig, Argentina has imposed restrictions on shipping coming to and from the South Atlantic islands, stopping vessels from using its ports and territorial waters in a bid to disrupt the logistics of oil companies exploring around the contested archipelago.
Announcing the restrictions, cabinet chief-of-staff Aníbal Fernández said: “This has to do with the defence of the interests of Argentines, not just about sovereignty.”
President Cristina Kirchner is expected to use her appearance at the Group of Rio summit today to rally regional opposition to British companies drilling around the islands. She has already received strong backing from Venezuela’s president Hugo Chávez who, during a televised ministerial meeting last week, told Britain: “Get out of there and give the Malvinas back to the Argentine people. Enough of empires.”
The Malvinas is the Argentine name for the islands, which lie almost 500km (300 miles) off its Patagonian coast. Buenos Aires has claimed the territory, which Britain has occupied since 1833. The two countries fought a war in 1982 in which over 900 people died as Britain expelled an Argentine occupation force. The islands’ population of 3,000 overwhelmingly demands to remain British.
In response to the hardening of Argentina’s stance, the British navy says it has a destroyer on a “tight leash” patrolling the islands, while Gordon Brown has said “routine patrols are continuing . . . We have made all the preparations that are necessary to make sure the Falkland Islanders are properly protected.”
Analysts in Buenos Aires say the Argentine government is not seeking a new armed confrontation. “In the last seven years, Argentina is the South American country that has most reduced its military spending. The armed forces today have even less capacity to confront the British than in 1982,” says Argentine analyst Rosendo Fraga.
The British media, citing a British Geological Society report, have claimed the region could hold up to 60 billion barrels of oil which would rank it with the declining North Sea fields. But the energy industry considers the recoverable amount far more conservatively. The four oil companies with exploration licences from the Falklands government hold out the prospect of 17 billion barrels, which if realised would make it one of the largest new oil regions discovered anywhere in recent decades. But the initial plan is to prospect in two areas for 2.6 billion and 3.8 billion barrels.
Several wells drilled in the 1990s found oil and gas but, with the price of a barrel then about $10, the finds were not considered viable. The current high price of oil makes the region more attractive, but logistics remain a significant problem as the oil lies thousands of kilometres from energy-hungry markets in the northern hemisphere. If Argentina were to close all ports along its 4,600km coastline to oil companies, it would significantly increase the cost of supplying and maintaining rigs and support vessels.
In the last decade, there has been a boom in exploration in the South Atlantic. In 2007, Brazil made the largest oil find in the Americas in over three decades off São Paulo, and believes it has discovered a new oil region along its coast that could hold up to 150 billion barrels. Last month, Uruguay signed agreements to drill off its coastline, while, across the ocean, Namibia has attracted companies eager to replicate the deep-sea oil finds in neighbouring Angola.