31 March 2012

Argentina to stock markets: Falklands oil illegal

Bloomberg Businessweek
by
ALMUDENA CALATRAVA



Argentina has asked stock markets in New York and London to warn investors of its claim that five oil exploration companies are working illegally off the Falkland Islands, which Argentina contends were stolen by Britain more than a century ago.
Foreign Minister Hector Timerman announced Thursday that he had sent letters to the directors of both markets urging them to force any company involved in oil exploration near the islands to warn investors that the companies risk civil and criminal penalties in Argentina, which considers the "Islas Malvinas" to be part of its sovereign territory.
The companies are Argos Resources Ltd., Desire Petroleum PLC, Falkland Oil and Gas Ltd., Borders & Southern Petroleum PLC and Rockhopper Exploration PLC.
Islanders and Britons involved in the Falklands oil business say they have proven they can develop oil no matter what Argentina says or does.
"It's like baying at the moon. The claim isn't recognized by the people of the Falklands or the people of Britain. Investors are aware that Argentina is making noise, but it's really just noise," said John Foster, managing director of Britain's Falkland Islands Holdings PLC, which owns a minority share of Falkland Oil and Gas Ltd. "As a practical matter I don't think it will have any impact."
Rockhopper struck oil north of the islands last year, finding in its Sea Lion field what may be as much as 450 billion gallons of petroleum, and is looking for $2 billion in investment money to begin producing crude. Analysts have said that over its lifetime the field could deliver $10.5 billion in taxes and royalties to the Falkland Island government.
This year, Borders and Southern and Falkland Oil and Gas are drilling exploratory wells south and east of the islands, investing $1.3 million a day in hopes of a major discovery.
All five companies are small players in the oil industry and would need major partners to shift into production. The Argentine government has sought to keep that from happening or at least make it more expensive by barring any participating companies from doing business in Argentina and now by trying to cast doubt on the legality of the exploration.
With Argentina's warning letters, "the stock markets will be able to evaluate if they should continue handling the companies' shares, and can demand that the companies inform the markets so that current and future investors are properly informed of the legal risks" of continuing to operate on Argentina's continental shelf, Timerman said.
A spokesman for the New York Stock Exchange, Rich Adamonis, confirmed the exchange received the letter and said it had no immediate comment.
Argentina has asserted its sovereignty over the islands ever since they came firmly under British control in 1833. The two countries fought a war in 1982 that killed more than 900 people, and with April 2 marking the 30th anniversary of an Argentine military incursion, both countries have engaged in an escalating war of words over their future.
President Cristina Fernandez accused Britain again on Thursday of militarizing the conflict, and said "Argentina is always on the side of peace," even as her foreign minister tried to ratchet up political, economic and legal pressure on the islands.
The Falkland Islands are no longer the distant and declining British colony that Argentina occupied a generation ago. They are a self-governing British overseas territory, and as such their population of 3,000 will determine what happens with the oil, said Stephen Luxton, the mineral resources director for the Falkland Islands government.
"Oil provides the basis for securing our long-term future," Luxton said.
Britain, meanwhile, criticized the Peruvian government's decision this week to cancel a planned visit by a Royal Navy warship in a gesture of solidarity with Argentina in its dispute with Britain over the Falklands.
"This has been perceived by the people in the UK (United Kingdom) as an unfriendly act," the British government said in a statement released by its embassy in Peru.
See also:  

Falklands Dispute Sparks Concerns in Oil Market



Press Conference

Department of Public Information • News and Media Division • New York

PRESS CONFERENCE BY MINISTER FOR FOREIGN AFFAIRS OF ARGENTINA




After lodging protests against what he described as the United Kingdom’s militarization of the South Atlantic with the leadership of major United Nations bodies, Argentina’s Minister for Foreign Affairs called today for the start of dialogue on the sovereignty of the Malvinas Islands ( Falklands).



“We have the Secretary-General supporting dialogue, the President of the General Assembly supporting dialogue, the President of the Security Council supporting dialogue, the Republic of Argentina supporting dialogue,” Foreign Minister H├ęctor Marcos Timerman said at a Headquarters press conference.  “So only Great Britain is missing,” he added.



Thanking several Latin American representatives in the room for their attendance, Mr. Timerman gave an overview of the presentation he had provided to the Secretary-General and the Presidents of the Security Council and General Assembly, which was augmented by visuals of British military hardware and maps.  He also reiterated his country’s commitment to regaining sovereignty over the Malvinas (Falklands), the Sandwich Islands and the surrounding maritime areas, solely by peaceful means.



Displaying a map of the South Atlantic, he pointed out the presence of British military bases on Santa Helena, the Georgia Islands, Antarctica, the Malvinas ( Falklands), among other places.  That made the United Kingdom the largest military power in the region, with control over traffic in and around it exercised from a capital 14,000 kilometres away, he said.  It was the last vestige of colonial empire, he noted, adding:  “‘Britannia rules’ only applies in the South Atlantic.”



Citing reports of a Vanguard nuclear submarine stationed in the region, he said the British Government had refused to confirm or deny them.  If it was in the vicinity, it would not be the first time, he added, recalling that, in 2003, Argentina had received intelligence information about spilled nuclear materials in the Malvinas ( Falklands).  He noted that the United Kingdom had signed on, with a reservation, to a treaty on a nuclear-weapon-free zone in Latin America.  However, it was apparently not in compliance with that instrument, unlike all the other signatories, he said.



Screening pictures of a Dauntless Type 45 destroyer, Typhoon 2 warplanes, Taurus missiles and an ultra-sophisticated communications network that he said were being deployed in the islands, the Minister stressed that such hardware outperformed all other military capabilities in the region and was of the kind recently used in Libya and the Persian Gulf.  Asking why such weaponry was needed in the region, he noted that it put Argentina, Uruguay, a large part of Chile and southern Brazil within range, adding that British aircraft had violated Argentine airspace relatively recently.



Maintaining that the United Kingdom was using an unjustified defence of self-determination as an excuse for militarizing the South Atlantic, he said it faced no threat that Argentina would restore its sovereignty over the Malvinas ( Falklands) through military means, emphasizing that its Constitution prescribed only peaceful means in pursuing that purpose.  He urged the United Kingdom to comply with the numerous General Assembly resolutions that called for both parties to sit down at the negotiating table and refrain from the militarization of the South Atlantic.  “Give peace a chance,” he said, quoting John Lennon.



In response to a question, Mr. Timerman said that the President of the Security Council had pledged to communicate his information to other Council members, and to request a meeting with representatives of the United Kingdom so that he could transmit his protest and his desire to conduct a constructive dialogue on sovereignty.  The Security Council presidency, currently held by Togo, would then communicate to him the United Kingdom’s reply and the responses of Council members.



He said the current escalation in the dispute had been prompted by recent statements by the United Kingdom’s Prime Minister, Defence Secretary and military officials, urging a military solution and accusing Argentina of colonialism.  If any country was colonialist it was the United Kingdom, he countered, recalling the history of the dispute between the two countries.



Asked about the self-determination of the 2,500 to 3,000 inhabitants of the islands that wished to remain British, he said that, while Argentina was a staunch defender of the right to self-determination around the world, the United Nations stated that a country’s territorial integrity could not be determined by the people inhabiting parts of it.



He went on to emphasize that the Malvinas (Falklands) fell naturally to Argentina by its location, and their population was not indigenous.  In any case, international norms stated that the interests of inhabitants, not their desires, must be taken into account, he added, comparing the situation to that of Hong Kong.  The flag currently flown by ships from the Malvinas ( Falklands) was rejected by relevant regional organizations.

No comments: