Falklands oil exploration 'illegal'

Updated: 
FalklandsArgentina has asked stock markets in New York and London to warn investors of its claim that five oil exploration companies are working illegally off the Falkland Islands, which Argentina contends were stolen by Britain more than a century ago.

Foreign Minister Hector Timerman announced that he had sent letters to the directors of both markets urging them to force any company involved in oil exploration near the islands to warn investors that the companies risk civil and criminal penalties in Argentina, which considers the "Islas Malvinas" to be part of its sovereign territory.

The companies are Argos Resources, Desire Petroleum, Falkland Oil and Gas, Borders & Southern Petroleum and Rockhopper Exploration.

Islanders and Britons involved in the Falklands oil business said they have proven they can develop oil no matter what Argentina says or does.

"It's like baying at the moon. The claim isn't recognised by the people of the Falklands or the people of Britain. Investors are aware that Argentina is making noise, but it's really just noise," said John Foster, managing director of Britain's Falkland Islands Holdings, which owns a minority share of Falkland Oil and Gas.

"As a practical matter I don't think it will have any impact."

Rockhopper struck oil north of the islands last year, finding in its Sea Lion field what may be as much as 450 billion gallons of petroleum, and is looking for two billion US dollars in investment money to begin producing crude.

Analysts have said that over its lifetime the field could deliver 10.5 billion US dollars (£6.6bn) in taxes and royalties to the Falkland Island government.

This year, Borders and Southern and Falkland Oil and Gas are drilling exploratory wells south and east of the islands, investing 1.3 million US dollars a day in hopes of a major discovery. All five companies are small players in the oil industry and would need major partners to shift into production.

The Argentinian government has sought to keep that from happening or at least make it more expensive by barring any participating companies from doing business in Argentina and now by trying to cast doubt on the legality of the exploration.

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