Argentina Plans To Sue British Oil Companies

Argentina has escalated its diplomatic battle with Britain over the Falkland Islands by taking steps to sue five UK oil exploration companies.

The Argentine president has targeted Desire Petroleum, Falkland Oil and Gas, Rockhopper Exploration, Borders and Southern Petroleum, claiming the firms are engaging in "illegal and clandestine activities" by drilling around the islands.

Cristina Fernández de Kirchner said the companies were operating "in a sovereign area of the Argentine nation and as such fall within its specified laws and rules."

Her foreign ministry said the declaration opened the way for the "immediate launch" of criminal proceedings against the small oil companies - which only moved into the area two years ago.

It said the Argentine government would soon make contact with Britain's Treasury, the Financial Services Authority, the International Organisation of Securities Commissions and the New York Stock Exchange as it pursues the threat.

The British Government has hit back and promised to work with any company potentially affected.

A Foreign Office spokeswoman said: "These latest attempts to damage the livelihoods of the Falklands Islands people regrettably reflect a pattern of behaviour by the Argentine government.

"From harassing Falklands shipping to threatening the islanders' air links with Chile, Argentina's efforts to intimidate the Falklands are illegal, unbecoming and wholly counter-productive."

The Falkland Islands' oil reserves - which have remained untapped until now but which analysts predict could be worth tens of billions of dollars, have been a major source of tension between the countries since their discovery in 1998.

The rocketing price of crude oil from $10 to $125 a barrel has enticed British exploration firms back to the islands since 2010 - much to Argentina's dismay.

So far only Rockhopper - named after a Falklands penguin breed - has confirmed significant oil reserves, in the Sea Lion field to the north of the islands.

The war of words over the Falklands has intensified around this year's 30th anniversary of the bloody 74-day conflict - when 255 British troops and three female islanders were killed.

Britain has ruled the islands since 1833, successfully defending them in 1982 after sending a naval task force to repel an invasion by Argentina, which calls the archipelago the Malvinas.

Last November Argentina slammed the decision to deploy the Duke of Cambridge to the islands as part of his helicopter rescue pilot training as "provocative".

And in May an Argentine advert featuring one of their Olympic hopefuls training on the islands was criticised by the British Government and the IOC.