Currently licensed acreage offshore Falklands

The Falkland Islands said it would oppose any Argentine company exploring for oil and gas in its waters, amid a diplomatic row between the U.K. and the South American nation over drilling in the disputed territory. 'We’ve discussed what we would do in the circumstance that an Argentine company requested a licence and it would be unlikely that one would be given,' Emma Edwards, in charge of the islands’ eight-member assembly’s minerals portfolio, said in a Feb. 4 phone interview from Port Stanley, the capital.

Argentina summoned U.K. embassy officials on Feb. 2 to protest the imminent start of drilling near the islands by London-based Falkland Oil & Gas. The islands lie about 480 kms (298 miles) off the Argentine mainland in the Atlantic Ocean. The South America nation has claimed sovereignty since losing the war the two countries fought in 1982. Argentine companies would only be accepted for oil and gas licences in the areas as minority partners in joint ventures with companies from other countries, according to Edwards.

The Falkland Islands legislative assembly is empowered to pass legislation and each member is elected as an independent as no parties are represented in the body, according to the Falkland Islands government Web site.

A partnership led by the Argentine unit of Spain’s Repsol YPF plans to start exploratory drilling in the Argentine-controlled waters of the Falkland basin in the second half of 2010. Brazil’s Petroleo Brasileiro and Argentina-based Pan American Energy are also part of the venture. The drilling will take place 289 kms off the coast of the Argentine island-province of Tierra del Fuego.

U.K.-based Desire Petroleum plans to start drilling in British-controlled Falkland waters once a rig called the Ocean Guardian arrives. Desire Petroleum will lease the rig to companies such as Rockhopper Exploration and Falkland Oil & Gas to drill their own offshore wells in the area. The rig is expected to arrive at the islands on Feb. 17, according to Bloomberg ship-tracking data. 

Source: Bloomberg