Veterans of the 1982 Falklands (Malvinas) War in Buenos Aires, Argentina, April 2, 2015. JUAN MABROMATA/AFP/Getty Images
On Saturday, the British Foreign Office dismissed a threat from Argentina to prosecute oil firms drilling near the disputed Falkland/Malvinas Islands, and London reiterated its support to proceed. Three British firms – Premier Oil, Rockhopper Exploration, and Falkland Oil & Gas – announced on Thursday that they had found oil and gas in a remote field north of the islands. This prompted Daniel Filmus, Argentina’s head of Malvinas Affairs, to state “The new exploration efforts to try to find hydrocarbons in the area carry a huge environmental risk. We want the owners of the companies to be tried according to Argentine laws and international statutes.”
Argentina claims these islands off its southern continental shelf, and even fought an unsuccessful war to seize them in 1982, long before oil was discovered there. The British firms’ announcement could not have come on a more inflammatory date: April 2, the 33rd anniversary of that brief war, which still rankles Argentina’s nationalistic citizens.
The spat began when the British seized the islands from Argentina’s control in 1833. Following the sudden war in 1982, the dispute was relegated to the backburner until 2010 when Britain authorized oil exploration in the ocean surrounding the Falklands. Since then, oil has become the main driver behind the dispute, as the prospects for offshore oil have grown thanks to better-than-expected results. In 2012, British oil companies estimated there were some 8.3 billion barrels of oil in the waters around the Falklands — triple the UK’s reserves. Exploration is ongoing, and some geologic estimates put the total amount of oil in the Falklands basin at around 60 billion barrels.
Argentina is trying hard to reverse its past few years of costly energy imports (leading to estimated annual energy trade deficits of $6-8 billion) by increasing its own oil and gas production. It views the Malvinas (what it calls the islands) and surrounding resources as part of its national patrimony, and the 3,000 British residents of the islands as “foreign occupiers.”
Argentina has renounced the use of force, but its non-violent assertion of sovereignty over the Malvinas is quite hostile. While shoring up international support for its claims and calling for direct negotiations with the U.K., Argentina refuses entry to any ships flying the flag of the Falklands. More importantly, many of Argentina’s provinces have passed laws that refuse entry to their ports for any ship involved in business activities (including oil exploration or production) off the Falklands. Argentina has even been pressuring cruise lines to skip the Falklands in order to harm tourism revenues there, with some success.
But recently the U.K. has raised the alarm. Since last year, speculation has run amok that Argentina would receive long-range fighter-bombers from Russia in exchange for beef and grain, potentially upsetting the status quo in the South Atlantic. In response, the U.K. announced that it will redeploy Chinook helicopters to the Falklands and spend some $418 million over the next decade to renew and update communications and missiles systems in the islands. That announcement was ridiculed by Argentina’s president, who said the money should be spent on feeding Britain’s poor rather than facing a non-existent military threat from Argentina.
With lives sacrificed on both sides in the war, not to mention the national pride and prosperity at stake, even the dramatic fall in oil prices cannot dampen this dispute.
