MercoPress. South Atlantic News Agency

Argentina begins legal actions against oil companies operating in the Falklands

The Leiv Eiriksson rig drilling in Falklands waters

The Argentine Government announced on Saturday it had begun the legal proceedings put together with the AFIP tax agency against five British oil companies, accusing them of “carrying out illegal operations” in the Falklands/Malvinas Islands.

In an official press release published on Argentina’s Foreign Ministry’s website, announced that a group comprised of General Attorney’s Office, the Treasury’s General Attorney, AFIP tax agency and the Energy Secretariat “are coordinating legal and administrative strategies against the companies.”

“The Foreign Ministry has provided information and data that prove the aforementioned illegal drilling to the Energy Secretariat in order to begin legal proceedings against each of the five affected British companies,” the communiqué stated.

The measure is being carried out against: Argos Resources Limited, Borders & Southern Petroleum PLC, Desire Petroleum PLC, Falkland Oil and Gas Limited and Rockhopper Exploration PLC which all have exploration licences and some have been involved in drilling off shore the Falklands.

In addition, it also informed that “legal cases against these five companies before the General Tax Directive (DGI) and the General Customs Directive (DGA) have been opened.”

ENARSA Argentina’s state energy company will act as lead plaintiff in the lawsuits. Legal proceedings will be announced to the UK’s Financial Services Authority, “in order to safeguard the principles that rule the world’s financial markets,” the communiqué concluded.

Earlier in the week Argentina revealed that both the New York Stock Exchange Executive Director and the head of the London Stock Exchange were warned about the “illegal” activities being carried out by the five oil companies and their exposure to fines or other administrative actions.

Addressing the head of the London Stock Exchange, where shares of these companies are traded, Foreign Affairs minister hector Timerman demanded shareholders are informed of risks involved.

“We have solicited ... that they be required to make these illicit activities known and quantify the risks involved. In this way, the stock exchange will be able to evaluate if the firms can continue to list their shares or whether they must provide more information to the market.”

The companies involved trade in London but Argentina also advised New York regulators, in case the companies move to list there in the future.

The Argentine government also sent along a list of all the companies linked to the five exploration companies, including international banks, auditors, brokers, advisers and lawyers, along with institutional investors.