Falkland Islands: First it was sovereignty, now it's oil

The British military and the Foreign Office are stepping up surveillance of Argentinian naval action following the threat from Buenos Aires to blockade the Falkland Islands.

The imminent arrival of a British company’s oil rig in the area is an immediate source of friction between the two countries, which has reignited 28 years after the war with the discovery of rich petroleum and gas reserves around the islands.

The Argentinian government has declared that it was taking control of all shipping between its coastline and the disputed islands it calls Islas Malvinas and the adjoining South Georgia, a claim promptly rejected by the UK.

Buenos Aires has demanded that the Falklands should suspend oil exploration on the seabed, which is estimated to contain 60 billion barrels of oil

– indicating that it has reserves on the scale of the North Sea. Last week Argentina detained a supply ship, the Thor Leader, which was transporting pipes to the islands from an Argentinian port.

The oil rig, the Ocean Guardian, is said to have been “buzzed” by Argentinian warplanes on its way to the South Atlantic, although other reports say that it may have been coastguard aircraft which was involved. Anibal Fernandez, the chef de cabinet in Buenos Aireas, said: “Any boat that wants to travel between ports on the Argentinian mainland to the Islas Malvinas, South Georgia and the South Sandwich islands… must first ask for permission from the Argentinian government.”

Following the 1982 war, an “economic zone” of 200 nautical miles was established around the Falklands. British military and diplomatic sources have stated that any attempt by the Argentinians to stop the rig in these waters would be in breach of international law.

They also pointed out that the Ocean Guardian was registered in the US and the detention of its crew would make Buenos Aires answerable for its action to Washington as well as Britain.

The British military maintains a force of 1,076 soldiers, and a small number of warplanes on the Falklands and there is a flotilla of ships offshore including, at present, the Type 42 frigate HMS York. The aircraft are on 15 minutes’ notice to fly.

A defence source said yesterday: “The Thor Leader was stopped at an Argentinian port. The rig will be sailing in international waters and any attempt to interfere with it would be in breach of international law and we have the forces available and ready in the region to address that problem if that is what the Government wants us to do.”

Earlier this week Air Chief Marshal Sir Stephen Dalton, the head of the Royal Air Force, drew attention to the situation in the South Atlantic in a speech to the International Institute of Strategic Studies (IISS) referred to “ the increasingly tense situation around the Falkland Islands” to stress the need for maintaining air superiority.

The Parliamentary all-party group on the Falklands yesterday called for Argentina’s ambassador in London to be censured over the actions of his government. The secretary of the group, the Conservative MP Andrew Rosindell, said: “Any attempt by Argentina to claim any sort of rights of sovereignty over the region is something we should take very seriously. I don’t think we should appease Buenos Aires – we found out last time what happens when we do that.”

Another member of the group, his fellow Tory MP Sir Nicholas Winterton, said: “They are trying to impede the economic progress of the Falkland Islands, because of course the encouragement of hydrocarbon exploration in the area is am important part of achieving a sustainable future for the islands.”

It is widely accepted the that Argentinian military does not have the capabilities to carry out another invasion of the islands, which are, in any case, far better defended now than they were three decades ago.

However, harassment of supply ships and the refusal to let them use Argentinian ports for supplies would significantly add to the cost for oil companies and, some analysts believe, this could be a tool to force the UK and the Falkland Islands to come to a deal with Buenos Aires.

There is also apprehension among some in Argentina that the situation may lead to the rejuvenation of the extreme right-wing in the country, which had been dormant since the fall of the military dictatorship.

Frederico Thomsen, a political analyst in Buenos Aires, said: “For centuries the Falklands were about some sheep, penguins and fish – and even so, we had a war. Should someone find ‘black gold’, things will get uncomfortable and nationalists will be stirred.”