Falklands 2010: Oil and sovereignty in the South Atlantic

Jeremy Martin Contributor
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Exploratory oil drilling began this week in waters off a set of islands in the South Atlantic where sheep have long outnumbered people. British oil concern Desire Petroleum’s rig arrived in the Falkland Islands to much fanfare and commenced a long-anticipated drilling campaign. Potentially important from an energy perspective, the drilling has stoked long-simmering tensions over British control of the islands and neighboring Argentina’s sovereignty claim on the archipelago.

The seriousness of the aged dispute is very real: In April 1982, Argentine military forces invaded the Falkland Islands. Militarily reiterating their claim to the Islas Malvinas, as they are known in Argentina, was in part a ploy conjured up by the ruling military junta at the time to distract from the chaos gripping the nation under their rule. Instead, the gambit expedited the demise of the junta’s grip on power.

The ingredients that led to that fateful military encounter appear to be long relegated to history. Save two crucial elements: Argentina remains adamant as to its claim over the wind swept islands. And Argentina is again suffering through a bout of political and economic sclerosis.

The history bears recalling as the publicly long-dormant row has again grabbed headlines. As the drilling activity has ramped up, so has the rhetoric from Buenos Aires. And for many, the setting evokes powerful historical parallels and a dynamic that again places the Falklands at ground zero of domestic politics in Argentina.

What does all of this renewed attention ultimately mean? In all likelihood the prospects for anything remotely resembling a repeat of 1982 and Argentine military action to counter the oil exploration efforts is slim. Indeed, President Kirchner has publicly ruled out military action. And though a decree aimed at limiting maritime traffic to the islands has been issued, it does not appear overly aggressive.

But the Argentine government does seem quite eager to use the flare-up as a catalyst for gaining international support for its long-suffering aim to gain sovereignty over the islands. President Kirchner cleverly used a just-concluded summit of Latin American and Caribbean leaders held in Mexico to garner her regional cohorts support: 32 nations voted unanimously in favor of Argentina’s sovereign claim over the islands.

The timing of the oil activity is quite relevant: Drilling commenced during a particularly difficult period for Cristina Kirchner’s government in Argentina. And the insertion of the ever-combustible element of oil into today’s equation has certainly added to the heated rhetoric.

It is fairly evident that the use of the issue has been tactical and intentional to distract from an almost endless string of missteps by the Kirchner government. The blunders include battles with the nation’s hugely important farmers over taxes, a falling out with her vice president, as well as continued economic chicanery that led to the soap opera sacking of the president of the Central Bank when they clashed over use of funds to satisfy international creditors.

On the heels of—and likely due to the multiplying faux pas—the Kirchner government has seized the Falklands as an opportunity to rally nationalist fervor. Incidents abound over the last week that underscores the degree to which nationalism has been unleashed. Reports have surfaced that the Falklands tourism Facebook page was inundated with pro-Argentina comments while cyber attacks on Falklands’ news web sites featuring Argentine flags, music and slogans have forced sites such as The Penguin to be temporarily disabled.

And then there’s the oil factor.

The potential oil resource in the waters surrounding the Falklands is not new, nor is it surprising to followers of South American oil prospects. For years, companies have dabbled in the area but most concluded that exploitation of the reserves was not economically viable. Advances in offshore technology coupled with elevated oil prices may have changed the equation.

This new wrinkle, courtesy of active drilling and exploration activity under the purview of the Falklands legislature and British government, has dramatically upped the ante for both nations. Indeed, British efforts to explore for oil in disputed waters have visibly served as salt in the Argentine wound and a reminder that their demand for sovereignty over the islands has gone nowhere. And now there may be significant economic and energy windfalls at stake.

A few days into the latest dispute, what is clear is that the Kirchner government will continue to use the issue as a diversionary tactic inside Argentina. But at that same juncture what remains unclear is whether their efforts internationally will yield anything more substantive than a resolution at the United Nations condemning the oil prospecting.

The Falklands unpleasant history combined with the new element of a potentially significant economic windfall means the dispute may recede from public view but will remain on a fairly high simmer.

Of course, all bets could be off if the Brits find massive oil deposits similar to those discovered in Brazilian waters to the north.

Jeremy Martin is a frequent commentator and writer on Latin American and energy issues. Working at the Institute of the Americas at the University of California, San Diego, he spends his time delving into the geopolitics of energy and closely following energy industry trends and policy issues across the Americas. He can be found on Twitter at @jermartinioa and contacted via e-mail at