Roughly 1.7 billion barrels of oil may lie in the Sea Lion field, 140 miles from the Falkland Islands, a major discovery by global standards. Argentina has called any drilling there illegal since 2010, when the field was first discovered. Now the oil has become the sharpest edge of a sovereignty fight that Buenos Aires has pressed, in one form or another, for well over a decade.
Pressure by other means
The islands have been British-controlled since 1833, and a war in 1982 did not settle the argument. Dead were 649 Argentinian soldiers, 255 British ones and three islanders. Since then Argentina has chosen the tools of trade and diplomacy over force.
By March 2013 the Guardian described a campaign that went well beyond speeches. After the war’s 30th anniversary the year before, Argentina had stepped up its noise at the UN and in regional bodies, took out full-page ads in the British press and made its boldest move by limiting access to the islands. Argentine diplomacy got South American neighbors to refuse ships flying the Falklands flag; flights over its territory were cut, and firms that work the islands’ resources faced sanctions. Mike Summers, a sixth-generation islander who sits in the legislature, listed the damage: denied air flight rights, efforts to put off tourist vessels, bans on fishing businesses and bans on support for hydrocarbon development. Living costs on the islands ran 20% higher than in Europe, partly because Argentine efforts to limit port access in South America pushed import costs up. A single banana cost about a pound.
The oil explained the timing, many Argentinians told the paper. Companies were said to have invested $1bn in offshore fossil fuels around the islands, and the first sovereignty referendum was about to be held. On 10 and 11 March, 1,500 eligible voters were asked whether the Falklands should keep their status as a UK overseas territory. Buenos Aires had called the vote “illegal.” Britain, for its part, insists no deal is possible unless the islanders are at the table. Residents voted overwhelmingly to stay British.
A harder line under Milei
On Thursday, September 3, Argentine President Javier Milei went on national television and vowed to punish oil companies drilling around the islands. Reuters reported that he had earlier favored diplomacy, but with more wells planned for the months ahead, and with Donald Trump repeatedly mentioning the islands, his tone had hardened. Milei said “winds of change” favored the Argentine claim, called Britain a country “in decline,” and told Congress to expect a “national sovereignty defence” bill. It would raise penalties for unauthorized operations near the islands and extend sanctions to suppliers.
Markets noticed. Rockhopper Exploration, a shareholder in the Sea Lion venture, fell 6% the next morning, and Navitas Petroleum, the operator, dropped 2%. Both companies said they hold valid petroleum licences and do not expect a material effect on the timetable for completing the project.
London answered with a flat refusal. “The Islands are British and will remain so because that is the overwhelming position of the Islanders,” foreign minister Ed Miliband wrote on X.
A separate report said Milei then gave the UK two weeks to halt all work on Sea Lion or face a request to the maritime tribunal in Hamburg, calling the project “the illegal plundering of our resources.” The tribunal can issue binding emergency orders, but cannot compel a government to obey.
Sources
- Argentinians dismiss 'illegal' Falklands referendum (The Guardian)
- Argentina's Milei steps up Falklands sovereignty claims with oil sanctions (Reuters via Al-Monitor)
- Argentina's Milei threatens legal action over Falklands oil project
