MercoPress. South Atlantic News Agency

Argentina announces “discouragement letter” to Billinton

Argentina announced a “formal protest” before the United Kingdom for having extended hydrocarbons exploration and production licences to the east and south of the Falkland Islands. The Foreign Affairs Ministry also anticipated “discouragement letters” to the companies involved reported the Buenos Aires press Tuesday evening.

This is the first reaction to the early Tuesday announcement by the giant Australian resources corporation BHP Billinton stating it had acquired an interest in fourteen licences for exploration and production offshore the Falkland Islands. BNP Billinton said contracts had been signed with Falkland Oil and Gas Limited, FOGL, "for rights to explore and if successful, eventually produce oil and gas from the East Falkland Basin located off the southern and eastern coast of the Falkland Islands". The production licences cover approximately 18 million acres and are located in water depths ranging from approximately 200 to 2000 meters. Argentine diplomatic sources described the situation as "a new unilateral action from the United Kingdom which illegitimately pretends to authorize oil and gas operations on the continental platform that are subject to Argentine sovereignty and jurisdiction". "We will also be sending discouragement letters to the private companies involved warning them of the illegitimacy of their acts and legal sanctions applicable", added the sources. Argentina, particularly under the current administration of President Nestor Kirchner has systematically protested all "unilateral actions" in the South Atlantic disputed area and is one of the several motives that convinced Buenos Aires "to terminate last March the 1995 joint declaration", which refers to mineral exploration in the area. "Once again the United Kingdom is trying to dispose of Argentine resources violating reiterated resolutions from United Nations calling for dialogue between both countries", underlined the sources. Under the agreement with BHP Billinton a minimum of two exploration wells will be drilled in the next three years and the agreement applies to FOGL's entire exploration acreage in the Falklands. Furthermore BHP Billinton acquires a 40% interest with an option to increase its interest to 65%, takes over the operatorship of the licences and will pay FOGL 10 million US dollars in reimbursement of certain historical costs. The announcement of the Australian resources giant comes at a very sensitive moment for Argentina immersed in presidential and congressional elections scheduled for October 28. The incumbent (and according to opinion polls) winning presidential candidate is Senator Cristina Fernandez de Kirchner's, the current First Lady who is campaigning on "the continuity" of her husband's administration achievements, with "some changes". Besides Falklands/Malvinas is a "very dear" issue for the Kirchner dynasty and the "penguins" group of trusted officials from the "cold south" who surround them, described by the Buenos Aires press. A diplomatic incident was already in the making late September when the British press revealed that the United Kingdom was planning to extend seabed resources claims beyond 200 to 350 miles in several areas of the globe including Falklands to the east linking possibly with South Georgia. However a British Embassy in Buenos Aires spokesperson downplayed the version saying no decision had been taken on the issue and that anyhow there had been joint discussions with Argentina. Under the United Nations Law of the Sea coastal countries have until 2009 to apply for the seabed resources claims. Nevertheless the Foreign Affairs committees of Congress were scheduled to hold a special meeting to address the issue, in spite of election campaings, and this week Foreign Minister Jorge Taiana brought up the issue with US Secretary of State Condoleezza Rice in New York in the framework of the UN General Assembly. Taiana informed Ms Rice of Argentina's "persistent interest in establishing negotiations with Britain" over the Falklands/Malvinas sovereignty, particularly now because of Britain's plans to extend its seabed resources claim beyond 200 miles.