MercoPress. South Atlantic News Agency

Argentina sends warning letters to banks supporting Falklands’ oil industry

A copy of the text in Spanish, was made public by London’s Sunday Telegraph

As many as 15 British and US banks have received warning letters by the Argentine embassy in London about possible legal action over giving advice or even writing research reports about companies involved in the Falkland Islands' nascent oil industry, London’s Sunday Telegraph said.

The letters, written in Spanish according to the British tabloid, are aimed at cutting financial support for the five London-listed exploration companies looking for oil in the region, including Rockhopper Exploration, Borders & Southern, Falkland Oil & Gas, Desire Petroleum and Argos Resources.

The banks targeted by the embassy include both those that have undertaken advisory and fundraising roles for the explorers and those that have written research notes on the subject, the Sunday Telegraph said.

The unsigned letters said the institutions, which include Royal Bank of Scotland, Barclays Capital and Goldman Sachs, could face criminal and civil action in the Argentine courts.

The two-page letter, to which a schedule of legal declarations about the Malvinas’ ownership are attached, is intended to warn off the banks from any further involvement in the South Atlantic oil industry.

The letter warns the banks to “bear in mind, when offering their opinions, risk ratings and investment recommendations, the existence and characteristics of the above mentioned sovereignty dispute and of the consequences of any unlawful hydrocarbon exploration activities in the Argentine continental shelf in proximity to the Malvinas [Falkland] Islands.”

“It should also be borne in mind that . . . participation in those activities will cause companies directly or indirectly involved in them to be subject to such administrative, civil and criminal actions as may be provided for in the Argentine laws governing such activities.”

The letters were sent to the individual banks by the Argentine embassy in London and were not signed, but contained the crest of the Ministry of Foreign Affairs and Worship.

The recipients of the letters fall into two separate categories - those who are advising the five oil companies and those who have written research notes either on the subject of Malvinas oil or on specific companies.

The banks and stockbrokers which have undertaken advisory and fundraising roles for the five which are believed to have received the letter include RBS, Credit Suisse, Barclays, and Oriel Securities. Those institutions whose research teams have written on the subject and have been targeted by the Argentine government are believed to include Goldman Sachs, Jefferies and Edison Investment Research.

Argentina has already said it would penalize companies which work with oil drillers exploring offshore the islands in the South Atlantic. Verbal sparring over the sovereignty of the Islands has heated up in recent months ahead of the 30th anniversary of the Falklands conflict.