Argentina has started to make a name for itself in the oil and gas world due to the vast reserves located in the Vaca Muerta shale region. If successfully developed, Argentina could become the first major shale producer outside of North America.
But just off the coast of Argentina in the Atlantic Ocean is another budding oil and gas region. Although it is not Argentine territory – this is a very sore subject – this area could also be another source of new oil and gas production. The Falklands (or as Argentina calls them, Las Malvinas) are a group of islands that have been under British rule since the 19th century. Argentina and the United Kingdom fought a short but bloody war in the early 1980’s in the waning days of the Argentine dictatorship.
After the war a standoff ensued. Argentina demanded the U.K. turn over the islands, but the U.K. has stood firm. Little movement took place over the past few decades. But Argentina is once again incensed about British control over the islands so near to its shores. The flare up in tensions in recent years has occurred because there is solid evidence that an oil bonanza lies just off of the islands – to the north, east, and south. Argentina has done its best to scare away investment, barring companies from the Vaca Muerta if they also operate in the Falklands. With the oil majors staying away, deciding they are better off staying on Argentina’s good side, only smaller companies…