Old rivals in war of words over Falklands oil fields

Britain and Argentina are squaring up to each other for a fresh fight over control of the Falkland Islands.

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London // Britain and Argentina are squaring up to each other for a fresh fight over control of the Falkland Islands. Unlike the 1982 war, which was sparked by an Argentine invasion, this time it is about oil - potentially, billions of barrels of it lying beneath the South Atlantic seabed.

Weather permitting, a Scottish rig will start drilling this week to determine just how much oil lies beneath the fields within the British-controlled, 240km maritime zone around the Falklands and islands of South Georgia and South Sandwich. Argentina, which last year lodged a territorial waters claim to a massive chunk of the continental shelf, encompassing all the waters around the Falklands, announced last week that special permits would be required by all ships heading from its ports or through its waters to the islands, which they call Islas Malvinas.

Britain has flatly rejected the move and stepped up its naval activity around the islands. The prime minister, Gordon Brown, pledged that the government would make "all the preparations that are necessary to make sure the Falkland islanders are properly protected". On Wednesday, Argentina will take its case to the United Nations, but the UK appears in no mood to compromise over islands that have been a British colony for almost 200 years and whose 3,000 inhabitants (plus 1,000 servicemen and a half-million sheep) are fiercely loyal to Britain.

David Miliband, the UK's foreign secretary, insists that all British oil exploration in the area is "completely in accordance with international law". For their part, the Argentines are in talks with their neighbours in a bid to impose a shipping blockade around the Falklands. So far, though, only Hugo Chavez, the outspoken socialist president of oil-rich Venezuela, has given his public support. "The English are desperate, the Yankees are desperate and here we have the biggest petroleum reserves in the world," Mr Chavez claimed over the weekend.

After the British ousted the Argentine invaders in 1982, in a war that cost almost 1,000 lives, the military junta in Buenos Aires collapsed and relations between the two countries gradually improved. In recent years, however, Argentina, beset by financial and political problems, has been making renewed and increasingly strident demands for ownership of the islands. Not coincidentally, it is the one issue capable of uniting the diverse political factions in the country.

The previous administration, under Nestor Kirchner, husband of the current president, unilaterally scrapped an agreement with Britain in 2007 to share the proceeds of any oil discovered in Falklands waters. Buenos Aires might now be regretting that decision as the drilling gets underway, though it is still unclear how commercially viable it will be to extract the 10 billion-plus barrels beneath the ocean.

Shell began exploring the area almost 20 years ago, but pulled out in 1998 because of the uncertainties surrounding the venture. The difference between then and now is that the price of oil was little more than US$10 (Dh36.7) a barrel then, less than one-seventh what it is now. For the moment, at least, the dispute seems unlikely to go beyond a war of words. For one thing, Argentina relies heavily on the United States as it struggles to cope with a massive national debt and, if push came to shove, Washington would undoubtedly back Britain in any military action.

Additionally, and despite the UK's involvement in Afghanistan, few doubt that British military power is far superior to Argentina's. "War is excluded from our horizon," Victorio Taccetti, the deputy foreign minister, said in a weekend radio interview. "We are trying to convince the British that it is in their interest to negotiate with Argentina. "This is not an escalation; this is just something that we have to do in order to protect our rights because we consider that this exploration and eventual exploitation of our natural resources is illegal."

Mr Taccetti added, however, that Argentina would not abandon its claim to the islands and that it would use "all the legal means to restrict the access to the islands from the continent". For its part, Britain believes its ships will still have access to ports in Chile should the permits proposal be accepted by some of Argentina's neighbours. The Financial Times commented yesterday: "The prospect of a new war remains very remote. But tensions have risen dangerously since the announcement that oil exploration is soon to begin in the waters around the Falklands.

"Clearly, neither Argentina nor Britain would benefit from a new outbreak of hostilities. But both nations could still benefit from a discovery of oil in the seas around the Falklands. "Even if the find were in British waters, Argentina would be the natural base for an oil and gas terminal and for the development of pipelines." dsapsted@thenational.ae