Argentina threatens legal action against drilling firms

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The Independent Online

Argentina ratcheted up the rhetoric over the disputed Falkland Islands yesterday, threatening to take legal action against any companies involved in oil exploration in the waters around the islands.

The threat was made last night by Argentina's Foreign Minister, Hector Timerman, who called the activities of any explorer working in the region "illegal" and "illegitimate".

Companies providing any logistical or financial support to the exploitation of Falklands oil will be included in the suits, Mr Timerman said.

As the only explorer to have struck oil off the coast of the islands, Britain's Rockhopper appears to have the most to lose, as it seeks partners to invest $2bn (£1bn) to develop its key Sea Lion project.

Borders & Southern and Falkland Oil and Gas also face legal action since both are set to drill exploration wells in the south of the islands later this year.

The British Government last night insisted it supported the rights of Falkland islanders to exploit the oil reserves.

"Hydrocarbon exploration is a legitimate commercial venture and the British Government supports the rights of the Falkland islanders to develop their hydrocarbons sector," a spokesman for the Foreign Office said. "This right is an integral part of the right of self-determination, which is expressly contained in the International Covenant on Civil and Political Rights," he added, referring to a United Nations' treaty.

Rockhopper struck oil off the islands in 2010. It estimates that the Sea Lion discovery contains about 350 million recoverable barrels of oil.

The company does not have enough money to develop the field into one that produces oil and is therefore hunting for a partner to inject the extra capital it needs so that production can start.

Tensions between Argentina and Britain have been rising ahead of the 30th anniversary of the Falklands war this April.