Regional leaders to support Argentina in Falklands dispute

The promise of significant oil reserves in the seabed surrounding the Falkland Islands is heating up a longstanding row between Britain and Argentina over the sovereignty of the archipelago, as Argentine President Christina Kirchner rallies the support of neighbouring leaders in the dispute.

On Monday, the British exploration company Desire Petroleum launched a drilling project, baptized “Liz”, in waters near the British-ruled islands, despite Argentina’s call last week to halt drilling plans.

Desire spokesperson told France24.com that drilling would last around 30 days, and that it would refrain from making further comments about the project until then.

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Argentina protested that oil exploration was being planned in disregard of UN recommendations to avoid unilateral actions that aggravate the decades-old dispute over the Falklands. The Kirchner government has also moved to restrict international ships travelling through its waters.

The British government has insisted that oil exploration in the area was in complete accordance with international law.

Argentina lost a short and humiliating war against Britain over the Falklands in 1982; the islands have been a British overseas territory since 1833.

But Argentina’s call against British imperialism should receive a regional boost on Tuesday, as leaders from 32 Latin American countries are expected to sign a declaration backing Argentina’s claim to the Islas Malvinas, as the archipelago is called in the region.

“Our country has reached an important diplomatic victory in winning the support of the [the region’s] foreign ministers,” Argentine diplomatic chief Jorge Taiana told the press gathered at a two-day summit in Cancun, Mexico.

On Wednesday, Taiana is expected to bring his country’s grievance to UN chief Ban Ki-moon, in hopes the pan-American declaration will put pressure on Britain to open talks with Argentina over the future of the contested territory.

Oil and national fervour

“Britain may have to find a compromise, not in terms of territory, potentially in terms of revenue sharing,” says Daniel Litvin, director of Critical Resource, a consulting firm that focuses on the natural resource industries.

Oil drilling around the Falklands began as early as 1998, but with crude oil dipping down to $10.35 per barrel that year, further exploration was deemed unprofitable.

Desire has said that the Liz prospect alone could render up to 400 million barrels of oil, and more than six billon dollars in revenues, with the price of crude oil hovering above 75 dollars a barrel. Adjacent prospects in the area are said to contain billions of barrels more.

According to Litvin, Brits have hardly talked about the Falklands since the end of the 1982 war, with no dramatic shift in popular opinion over the issue. Even in Argentina, where the price of beef and inflation have dominated headlines, the diplomatic row is far from the ordinary citizen’s worries.

“I think the key question is what happens if a lot of oil is actually discovered,” says Litvin. Interest in oil production in the Falklands, as well as diplomatic tensions, could buoy again.

“If not much oil is discovered it remains a rocky, windswept island,” says Litvin. “Nationalistic fervour around oil is greater than just around bits of land.”