A developing Argentine-British row over the Falklands prospecting for oil and gas offshore may be part of a diplomatic strategy by Buenos Aires to rattle investors who are pouring millions into the project, analysts said.
Political temperatures have been rising after Argentina revived its campaign for sovereignty over the Falkland Islands, a British overseas territory. Britain and Argentina fought a war over the islands after Argentina invaded the territories in 1982. Britain retained control but Argentina says it has sovereignty over the islands.
In a further diplomatic escalation, Argentina summoned the British envoy in Buenos Aires to deliver a stiff rejoinder to London over the scheduled start of drilling for hydrocarbons in the waters off Falkland Islands.
The Argentine Foreign Affairs Ministry said the area earmarked for drilling was part of the Argentine continental shelf and therefore Argentina's sovereign territory currently under "illegitimate British occupation."
As with most of Argentina's recent pronouncements, the note reiterated Argentine "sovereignty over the Falklands, South Georgia and South Sandwich Islands and adjoining maritime spaces, which are an integral part of its national territory."
Britain also reaffirmed its sovereignty over the area. In his end-of-year message to the Falkland Islanders, British Prime Minister Gordon Brown said there was no doubt about British sovereignty over the Falklands and promised full support to developing the Islands' oil industry.
The war of words has intensified as various stages of fundraising, planning and leasing of a giant drilling rig were reached since last year. From muted protests by Argentina last year the verbal exchanges have acquired a new harshness and urgency that is unlikely to be become milder in the coming weeks, analysts said.
The exploratory drilling rig, Ocean Guardian, is currently on its way to the Falklands, where it expects to begin operations some time towards the end of February. However, analysts said the arrival of the drilling rig would most likely take the recriminatory exchanges a few notches higher.
The rig was contracted by Desire Petroleum Plc, but at least three other oil prospecting companies are also due to work in the area after they were granted licenses by the Falklands government.
Industry sources said the companies, Rockhopper Exploration Plc, Borders & Southern Petroleum Plc and Falkland Oil & Gas Ltd in association with BHP Billiton, would most likely be leasing the same rig for their own exploration operations.
The Falklands government, meanwhile, is looking for additional investment partners and even approached Chilean interests to explore joint exploration ventures.
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