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Falklands Flare Up - Could a New Oil Find Re-Ignite an Old Conflict?

By John Daly | Mon, 20 February 2012 23:52 | 8

The Falkland Islands, a British windswept archipelago in the southern Atlantic off the coast of Argentina, last had its moment in the media spotlight three decades ago, when the two nations fought a brief but vicious conflict after Buenos Aires invaded the islands, providing a PR boost to Argentina’s ruling junta.

But, Argentina lost, and the 11-week conflict claimed more than 900 lives, leaving Britain in control of the islands.

UK analytical firm Edison Investment Research is now reporting that the Falklands’ oil industry could potentially be worth $180 billion in royalties and taxes, news that has reignited the smoldering diplomatic dispute between London and Buenos Aires.

On 13 December British-based oil and gas exploration company Rockhopper Exploration Plc announced that a new well proved its Sea Lion field 80 miles off the Falklands coast is bigger than expected, and is now projecting that it could recover as much as 430 million barrels of crude from its Sea Lion concession, 80 miles off the Falklands coast. The announcement encouraged other firms prospecting in the Falklands’ offshore waters, most notably Borders and Southern Plc and Falkland Oil and Gas Ltd.

Since Rockhopper Exploration Plc’s announcement, Britain has moved a number of naval units into the Falklands’ waters, prompting on 16 February Argentina’s Foreign Ministry to issue a communique commenting on the alleged “militarization of the South Atlantic” after the United Kingdom "sent a destroyer, a nuclear submarine and a prince" to the Falklands, demanding that London "report on the presence of a nuclear submarine in an area that is free of nuclear weapons" before concluding that their presence would constitute a violation of international treaties.

Argentinean policy over the disputed island chain has both a domestic and diplomatic context. On 16 February Argentinean Foreign Minister Hector Timerman officially accepted the UN General Assembly's offer to mediate between Argentina and Britain on the Falklands, stating that, "Argentine accepts the UN Secretary General Ban Ki-moon's offer to provide his good offices and if Britain accepts them too then we are on the right path; the path to a diplomatic solution, which is what Argentina wants."

But, being a democracy, not all Argentineans support their government’s current policy on the “Malvinas,” as the Falklands are known in Argentina. On 16 February La Nacion, a conservative newspaper frequently critical of governmental policy and Argentina’s second highest-circulation daily published a crucial commentary by Vicente Palermo on the "political maze" of the Falklands where he noted first that the chances of a change in stance on the part of the United Kingdom are very low and that successive Argentinean governments have done very little to win the islanders over, preferring to resort to "a policy of harassment and isolation," which in the end will merely serve to empower the Falklanders' lobby in Britain.

Even worse, earlier this month Catholic Bishop Jose Maria Arancedo called for the Argentinean claim to the Falkland Islands not to be used as a political issue.

Further losing the PR campaign at home, the previous day Buenos Aires’ Clarin newspaper reported on the police repression of a protest by former Falklands War conscripts in the capital, which the General Workers Union leader Hugo Moyano said marked a new trend in government policy.

The fact that Argentinean military conscripts lost their battle two decades ago against British military forces has made them in the eyes of many Argentineans unworthy of consideration. Commenting on the fact, another Clarin editorial by Eduardo van der Kooy noted the "government's ability to create its own problems, even where they do not exist," citing the Falkland Islands as an example, since President Cristina Fernandez de Kirchner's recent actions on the matter had made veterans of the war feel used and betrayed after they were not invited to the Presidential residence Casa Rosada for her speech on the Malvinas and remained dissatisfied by subsequent pronouncements on the subject.

On the plus side for Argentina, it has received backing from fellow Latin American countries, which have announced that they will not allow ships flying the Falklands flag to dock in their ports.

And if push comes to shove and military operations occur again, Venezuela's President Hugo Chavez, speaking last week at a meeting of the Bolivarian Alliance for the Peoples of Our America (ALBA) told journalists, "If it should occur to the British Empire to attack Argentina militarily, Argentina won't be alone this time. Venezuela is no power, but we've got some weapons, and the will to face any imperialist aggression."

More ominously for Britain and the United States, on 10 February, except for Washington, the 34-nation Organization of American States (OAS), the entire hemispheric community minus Cuba, backed Argentina's claim to the Falklands.
Buenos Aires is watching. On 17 February the Argentinean newspaper Ambito Financiero, citing confidential sources, reported that the Bahamian-flagged oil exploration rig

The Leiv Eiriksson platform, contracted by Borders and Southern Plc and Falkland Oil and Gas Ltd and prospecting Falklands waters alongside Rockhopper Exploration Plc’s Ocean Guardian oil rig, “was found, on 16 February, to be exploring in Argentine waters,” according to “irrefutable” satellite images.

In such a context, will Britain and the U.S. be willing to alienate the entire Western Hemisphere south of the Rio Grande on behalf of roughly 3,000 sheep herders?

Given the potential for conflict and Argentina’s determination not to let the issue slide, one can only hope that Rockhopper Exploration Plc’s along with Borders and Southern Plc and Falkland Oil and Gas Ltd offshore explorations come up dry and, if not, wonder how far Britain is willing to go to retain its control.

By. John C.K. Daly of Oilprice.com

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John Daly
Company: U.S.-Central Asia Biofuels Ltd
Position: CEO

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  • Philip on February 21 2012 said:
    Okay, let's get 'real' here shall we?
    The British had a reinforced brigade on the Falklands, about 3000 men. They now have a combined total presence on the islands of 1200 military personnel. They also have a number of Typhoon combat aircraft. These operate out of a well protected RAF airbase on the islands.
    It is said that the Argentine airforce is out of date and that a Typhoon could shoot down any number of Argentinian air force planes over the horizon. Whether this is technically possible or merely propaganda is another matter.
    Before the Falklands war in 1982 there were about 100 Royal Marines on the Falklands and, it is alleged, a nuclear submarine on patrol. It is alleged that the British government ordered the nuclear submarine to leave the South Atlantic, as part of defence cuts, and this persuaded the Argentine government of the time that invading the Falklands was a possibility.

    In those days UK still had a Navy capable of mounting expeditions to distant parts of the globe, although it is said that, had the Argentines invaded the year after, defence cuts would have left the UK without an aircraft carrier.

    Today those defence cuts are a reality, and the UK has no operational aircraft carrier. If the Argentines were able to take possession of the one RAF airbase on the islands, the UK could not retake the islands. It would be militarily impossible to do so. This has been said by no less a personage than the former British chief of staff Gen Sir Mike Jackson.
    The British government has been stupid enough to scrap its old aircraft carriers while awaiting the delivery of two more new ones ‘in the near future’. They have an 'agreement' with the French about cooperation in military matters including perhaps the use of the French aircraft carrier the Clemenceau. I somehow doubt the French would be very keen to let their aircraft carrier be used in a latter-day colonial war.
    If the Argentines wanted to invade the Falklands, the next few years would be a good time to do so, as the UK defence expenditure is to be cut again and again, especially as current operations in the Middle East come to an end and as oil exploration begins to yield dividends in the South Atlantic.
    It is my personal opinion that the British government is simply waiting for an opportunity to sell the Falklands to the highest bidder, bring the 3000 Falkland Islanders back to the UK to live on dismal council estates here, in order to cut back the expenditure necessary to keep the Falkland Islands British.

    The British government would let go of Gibraltar, the Channel Islands, the Scilly Islands, the Orkneys and Shetlands, the Outer Hebrides, and anything else to earn money or to save money, I think they would do so with alacrity, were it politically possible. If letting the Scots and the Welsh become independent would give the government at Westminster added revenue they would do that as well.
    Thatcher went to war with Argentina over the Falklands to save her administration that was at the time deeply unpopular and likely to be defeated at the next election in '83. It had all to do with politics and very little to do with patriotism and loyalty. Patriotism and loyalty only count when they win elections.

    It would not have surprised me at all if someone found out that the Thatcher government had instigated the Falklands war surreptitiously in order to increase her popularity for the elections and to push her program through. It was a bloody way to ensure another three periods of Thatcherite Tory government.

    The way things are today, if Cameron chooses to let go of the Falklands and bring the people home and leave the sheep to the Argentinians, I don't think anyone will give a damn after the initial media frenzy and letting off of hot air. The British have gone past the point of caring about anything that is not to do with the home country. They don't want to be reminded about the last pitiful remnants of empire any more than they want to be involved in Europe.

    The British are fast devolving into the Scots, the Welsh and little England. Perhaps one day they'll become federal so that Surrey and Yorkshire will have as much say in their affairs as Westminster. An England of the regions has been suggested as a political possibility. At present it is half a joke. But then two generations ago years ago, losing the Empire was considered to be a joke in very poor taste…
  • Prince Bishop of Durham on February 21 2012 said:
    Firstly the Argentinian's do not have the capability currently to take the Falklands. Their aircraft are in a poorer state than in 1982. I doub't for one minute that if they heaven forbid did take it back by force; knowing the British Establishment and philiosophy on life they would take it back at all costs on principal. Don't forget past History. I would like to see the rest of South America's solidarity then?! I doub't they would commit militarily to support a violation and act of war.
    They oil & Gas to the English will become even more important to retain in the Falklands if Scotland had independence. So no compromise will occur unless Argentinian Gov't concedes rights of the Falklanders.
  • Skipper on February 21 2012 said:
    While the British claim to the Falklands may have some weaknesses, Argentina forfeited any claim it had by invading in 1982 and then losing.
    Don't forget, Galtieri represented a corrupt and violent government that thought nothing of "eliminating" large numbers of its own people who didn't see things his way.
    Cristina Fernandez de Kirchner appears to be playing the "Malvinas card" to distract attention from the current failings at home and frankly I don't see her South American neighbours supporting her, should things turn nasty any more than the Warsaw Pact countries would have rallied to Russia's defence during the Cold War.
    Clearly the real issue, once again, is oil, but bad luck on Argentina for having played its cards so badly in 1982. If you behave badly and then lose, you don't deserve to be rewarded, even after a 30 year wait. I don't agree with war, which usually only brings misery, but whatever the Argentinians (who in my experience are usually rather civilised) say, the rules of the game are that if you launch an unprovoked attack on innocent people and then lose, you have to accept defeat, unless you plan to have another bash, which wouldn't be the best of ideas.
    I believe the British Government did offer some deal to share in the oil exploration around the Falklands, which the Argentinians rejected. Maybe some kind of compromise can be reached, but if the Argentinians insist on behaving like louts, then let them have another bloody nose to help them understand the rules.
  • ne11y on February 22 2012 said:
    Surely Daly's point is that Briain no longer has the capacity to give Argentina a bloody nose. Perhaps a nuclear sub can metaphorically kick their shins but it cannot carry an invasion force.
    It might have been better to relocate the islanders in 1982 as those of Tristan were - against their will. It would certainly have been more economical but then flag waving is always popular and there was a principle at stake. However, it is curious that a politician should have used principle as a reason for action!
  • Skipper on February 23 2012 said:
    There's not much doubt that Britain would be very pressed to organise an operation on the scale of what happened in 1982 to remove invaders from the Falklands, but that isn't the current situation.
    We're sitting on the islands and pretty determined not to make the same mistake agai of leaving thereby inviting another invasion.
    I'm not saying that it would be a walkover, but in the current situation, giving the Argentinians another bloody nose is quite feasible, but I hope it never comes to that as living in harmony is a much preferable alternative
  • s.ducain on February 24 2012 said:
    The Falklands were lost by the Spanish overseas empire 179 years ago. It is too late for Argentina to claim them,it would be like Britain claiming Calais off France because it was British until relatively recently.Or should the US give back Nevada, California etc to Mexico which they stole about 100 years ago. There is no case to answer on the Falklands. Added to that, 3000 odd English speaking inhabitants who want to remain as an independent sovereign country again leaves the Argies with no case.Britain is protecting the Falklands from Argentinian illegal aggression. The UN are totally out of order to suggest sovereignty is
    negotiable.The Argies need to be seriously warned not to start another illegal war.However we should perhaps prepare for eventualities. I would not hesitate this
    time round to nuke Buenos Aires with our most powerful
    bomb if they insist on this infantile behavior.I would go further than a nuclear strike, I would invade Argentina in a war of annihilation and take over the entire country. I think that would sort these retards
    out once and for all.
  • s.ducain on February 24 2012 said:
    The Falklands were lost by the Spanish overseas empire 179 years ago. It is too late for Argentina to claim them,it would be like Britain claiming Calais off France because it was British until relatively recently.Or should the US give back Nevada, California etc to Mexico which they stole about 100 years ago. There is no case to answer on the Falklands. Added to that, 3000 odd English speaking inhabitants who want to remain as an independent sovereign country again leaves the Argies with no case.Britain is protecting the Falklands from Argentinian illegal aggression. The UN are totally out of order to suggest sovereignty is
    negotiable.The Argies need to be seriously warned not to start another illegal war.However we should perhaps prepare for eventualities. I would not hesitate this
    time round to nuke Buenos Aires with our most powerful
    bomb if they insist on this infantile behavior.I would go further than a nuclear strike, I would invade Argentina in a war of annihilation and take over the entire country. I think that would sort these retards
    out once and for all.
  • Skipper on February 25 2012 said:
    The Argentinians keep repeating that they have no warlike intentions and I hope they're right. But I'm sure I remember correctly that it was Argentina who launched a completely unprovoked invasion on these virtually undefended islands (no doubt that's why they did it!), leading to the death and injury of very many on both sides.
    I don't recall that the Argentinian attacks on places like Bluff Cove were anything but brutal, so I'm afraid, Argentina, that history doesn't support your reassurances, which is why, this time, we're making sure it doesn't happen again.
    As for Cristina, maybe all her noise is to distract the Argentine electorate from her dismal performance. Perhaps the solution is for the Argentinians to elect a leader who can get their country functioning better without the need for such distractions.
    In the mean time, Argentina has shown itself to be unworthy to govern The Falklands - with Cristina's anti-British rhetoric, would any sane Falkland Islander vote to be governed by her? Argentina has forfeited any rights over the islands that it may have believed it had.

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