Bloomberg: Argentine Threat `No Effect’ on Oil Explorers, Falklands Says

By Stephen Voss

April 2 (Bloomberg) — Argentina’s threat to ban oil companies that explore around the Falkland Islands from working in Argentina will have no effect, since none of them operate in Argentina, a Falklands Islands Government official said.

The threat last week by Argentine President Nestor Kirchner came before today’s 25th anniversary of a war with the U.K. over the control of the islands.

Exploration-license holders around the U.K.-controlled islands include small London-listed companies such as Falklands Oil & Gas Ltd. and Rockhopper Exploration Plc.

“None of our operators have any operations in Argentina, so from our perspective we see this as having no effect,” Phyl Rendell, the director of the minerals resources department of the Falkland Islands government said in a telephone interview today from Stanley, the islands’ capital. “The anniversary of the war has brought about a number of statements from Argentina and oil has been one of the areas mentioned.”

Argentina also last week formally canceled a 1995 agreement with the U.K., already suspended in 2000, that would have covered joint exploration work in the region.
“That agreement was already moribund,” Rendell said. “We haven’t met or discussed joint licensing for at least five years.”

Other offshore-exploration license holders around the Falkland Islands include Argus Resources Ltd., Desire Petroleum Plc and Borders & Southern Petroleum Plc. Shares of Desire Petroleum slumped to their lowest in more than a year last month after the explorer said in January that it couldn’t find a rig to start drilling near the islands.

Royal Dutch Shell Plc, Europe’s largest oil company, explored around the Falkland Islands in the 1990s. It no longer holds any exploration assets or licenses there, a Shell spokeswoman said. Agip, now part of Italy’s Eni SpA, also previously held licenses. `Shell had licenses in 1996, but when the oil price tumbled in 1998, those big companies decided to withdraw,” Rendell said.

Argentina commemorates the 1982 invasion of the islands with a national holiday on April 2. Argentine troops were defeated by British forces on June 14, 1982.

To contact the reporter on this story: Stephen Voss in London at [email protected]

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