Falklands Oil Row: Argentina's Threat To Firms

Argentina has threatened oil firms seeking to operate off the Falkland Islands with 15-year jail terms, huge fines and confiscation of assets.

It is just the latest chapter in the dispute with Britain over sovereignty.

Its London embassy announced that new laws have been passed by the Argentine Congress to punish exploration it claims is in breach of a UN resolution.

But the Foreign Office insisted the activities were "wholly legitimate and legal" and entirely under the control of the Government of the island - a British overseas territory.

A spokesman said: "The UK Government unequivocally supports the right of the Falkland Islanders to develop their natural resources for their own economic benefit.

"This right is an integral part of their right of self-determination, which is expressly contained in the International Covenant on Civil and Political Rights.

"Argentine domestic law does not apply to the Falkland Islands or South Georgia and the South Sandwich Islands, which are UK overseas territories."

Buenos Aires has issued repeated written legal warnings to firms that they face administrative, civil and criminal action for operating off the islands - which Argentina calls Las Malvinas.

In a statement, the embassy said the new law "provides for prison sentences for the duration of up to 15 years; fines equivalent to the value of 1.5 million barrels of oil; the banning of individuals and companies from operating in Argentina; and the confiscation of equipment and any hydrocarbons that would have been illegally extracted".

It added: "The Argentine Government has protested against and rejected all of the United Kingdom's attempts to promote and authorise such hydrocarbon exploration and exploitation activities in the area of the Argentine continental shelf."

Islanders voted by 1,513 to three to remain a British overseas territory in a referendum in March but Argentina has since stepped up its claim over the territory at the UN.