Kim Sengupta: From sheep-shearers to would-be sheikhs

(EPA)

The Falkland Islands, when they did become briefly famous, did so as desolate pieces of land with little to show apart from their vast population of sheep and penguins, over which Britain and Argentina were fighting a bloody war.

Three decades on, the traditionally conservative and dour islanders are about to become the sheikhs of the South Atlantic with 60 billion barrels in the surrounding seabeds giving them a potential income matching the wealthiest states in the Middle East.

Port Stanley, goes the joke, will be renamed "Baa-rain", the capital of the Falkland "Oilands". Russian oligarch-style superyachts will sit alongside the fishing fleets, and private jets will be parked in serried ranks at the modest airport, which will undergo a thorough revamping.

In fact the 3,000 Falkland Islanders already have one of the highest standards of living in the world, with the Gross Domestic Product at £105m, rising from £80m the year before.

Fishing provides 60 per cent of that income, with a 200-nautical mile "economic zone" providing fertile seas for exports to North America and Europe. Trawlers from Korea, Taiwan, Russia and Spain hold licences to net the catch with two types of squids, native to the waters, which have become one of the staples for calamari.

There has also been a huge expansion in tourism with up to 90,000 visitors to the islands every year, mostly on cruise ships which then go on to South Georgia and other islands in the archipelago.

The coming of oil will add billions to revenue, making the Falklands one of the wealthiest states in the world. The UK government hopes that the overseas territory, once seen as a source of irritation on which vast sums were being spent on defence, will now share some of that wealth with the "mother country" – but Argentina's President, Cristina Kirchner, has other plans.

Proposals are afoot to redevelop the dockyards and build hundreds of new houses. Port Stanley's two schools and hospitals are being extended and equipped to become state of the art, and there are other projects under consideration ranging from promoting ecotourism to super-casinos.

The islands' governing body is also due to set up a "patrimony fund" for future generations – and it is they who are proving to be the problem. Education is compulsory until the age of 16 on the islands; pupils are then sent to the UK, often to two schools in Winchester, Hampshire, for further studies. Many, however, do not return to their faraway homeland, with its harsh environment and limited social and cultural amenities.

To counteract this, the governing body is offering lucrative grants for young people to settle in the islands with targeted migrants ranging from Zimbabwean whites to Hong Kong Chinese – almost anyone, in fact, as long as they are not Argentinian.

But the islanders remain cautious. Juanita Brock, owner of the Falkland Islands News Network, said: "It is lovely to speculate what will happen. The seismic surveys look outstanding. But we are holding fire until we know exactly how much." Mike Summers, a councillor, added: "We are talking about amounts of money that we have not been familiar with. But we're islanders, we tend to be pretty phlegmatic."