Argentina to sue UK oil groups

Marion Dakers
ARGENTINA has given its sternest warning yet that British oil explorers in the Falklands are no longer welcome in what it claims as its sovereign territory – but the UK government says it will back companies’ right to drill.

Argentine foreign minister Hector Timerman (pictured) called the activities “illegal” and “illegitimate” at a news conference yesterday. He said Argentina will bring civil and criminal charges in order to “sanction the companies involved”.

It is not clear whether Timerman’s threats includes banks and other firms linked to the four London-listed companies currently operating in the Falklands – Rockhopper, Desire Petroleum, Borders & Southern and Falkland Oil & Gas.

RBS, Lloyds, HSBC and Barclays are all involved in financing the Aim-listed firms, which have been among the most hotly-tipped stocks in recent years as investors pin hopes on a lucrative oil discovery amid dwindling global supplies.

Relations between the UK and Argentina have deteriorated again in recent months over who should control the area, with the 30th anniversary of the 1982 war being used by both sides to bolster their claims of sovereignty.

Sources close to several firms with links to the Falklands said they had no plans to change course in response to the threats, with one referring to Timerman’s statement as “just more rhetoric”.

And a spokesman for the UK foreign office said: “Hydrocarbon exploration is a legitimate commercial venture and the British government supports the rights of the Falkland islanders to develop their hydrocarbons sector. 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.”

Prime Minister David Cameron is understood to have discussed the Falklands with US President Barack Obama, who has given his support to British sovereignty.

Argentina pulled out of an oil profit sharing agreement with the UK in 2007, claiming that it had sole rights to the proceeds from fuel found in the region.

The Falklands, 400 miles off the South American coast, are home to less than 3,000 people, but dozens of companies have hunted for oil in the area over decades, to the chagrin of Argentinean authorities.

It was only last year that Rockhopper declared that it had found commercial quantities of the fuel.